12 Nov What are the most valuable gemstones?
If you’re thinking of investing in precious gems you will need to have a good idea of the value of the stones themselves. The first thing to remember is that value is determined by the market, and people will disagree about how to value any individual stone.
However, you can look at different aspects of value and decide the best way of investing to maximise the return on investment.
The gems which are most valuable by weight may not offer the best return, but some careful research and experience can create excellent opportunities.
Measuring the properties of gems
The most basic measure of a gem’s value is in its weight, which is expressed in carats, with one carat equal to 200 milligrams. However, the value of individual gems is also influenced by other factors, including their colour, cut and clarity. Along with the carat weight, these measures are known as the “Four Cs”.
A number of laboratories around the world analyse and certify gemstones, usually using the Four Cs measurements, but even those analysts can differ in their assessments.
Each stone is subjected to physical tests and microscopic examination to identify flaws and measure its different properties.
The laboratories are certified by different national and international bodies, and these bodies have different standards and procedures.
Estimating the value of gemstones
Once you know the Four Cs of a gem you can get a rough idea of its value, using on-line calculators.
Gems are very different from precious metals like gold or silver. A bar of gold is, generally speaking, the same as any other gold bar of the same weight and purity. However, every gems is unique, and standards like the Four Cs are only guides for buyers. This brings us to the question of the most ever paid for an individual gem.
The most valuable gemstones in the world
The most expensive gemstone ever sold at auction is the 59.6 carat pink diamond CTF Pink Star, which sold for more than $US83 million in 2013.
While that is the biggest price tag, it’s not the most paid per carat for a gemstone.
In 2016 a 14.62 carat vivid blue diamond called Oppenheimer Blue sold for $50.6 million. That’s $US3.46 million per carat, nearly two and half times more than the $US1.4 million per carat for the much larger CTF Pink Star.
The most expensive ruby is the 25.59 carat Sunrise Ruby, which sold for $US30 million in 2015, or $US1.17million per carat.
Most valuable types of gems
While it’s easy enough to list the most expensive individual sales, identifying the most valuable types of gemstones is trickier. Different types of diamonds are regularly cited as the most valuable gemstones, especially pink and blue varieties, but traders and miners may be more interested in margins than absolute value.
The potential profit on any type of gemstone varies wildly depending on the cost of sourcing it and the current demand. Diamonds are not as rare as you might think, but the demand is extremely high thanks to some very effective advertising.
Among the other gems which can draw extraordinary prices are rubies, emeralds and jadeite.
Where do the most valuable gems come from?
A number of regions are famous for providing high value gemstones of different types. For example, southern Africa is known for producing high quality diamonds, especially from Botswana, Lesotho, South Africa and Angola.
Similarly, Colombia is famous for its emeralds, while parts of South-East Asia have the reputation for the best quality rubies and jadeite.
These aren’t the only sources, just some of the most well-known and established. Mining companies are constantly looking for new deposits all over the world.
Finding value in unexpected places
Away from the best known gemstones, other gems can offer some intriguing opportunities for all sorts of reasons. The key is to do extensive research before you begin investing.
For example, Tanzanite is found only in the foothills of Mt Kilimanjaro and its value is expected to increase dramatically as it becomes harder to find. This means investing in these stones now could be smart, but such speculation always carries risk.
Alexandrite is another interesting gem, in that it appears to change colour in different lights and is very rarely found as stones larger than one carat. This means that the price increases dramatically if a stone is more than one carat.
Investing in these types of gems can offer a very different challenge and value to the more well-known stones like diamonds and rubies.
Cabochon gemstones are in high demand
Ultimately, any plan to invest in or mine precious gems has to be based on demand from the market. This means you can also find good returns if the value of the stones themselves is relatively low, as long as demand is high.
For example, in September 2019 the Gem Rock Auctions website noted a continuing rise in sales of cabochon gemstones. These are stones which have been polished and shaped rather than faceted, and they are usually lower value than cut stones.
Much of the growth in the market for these stones is being driven by home jewellery businesses, as they can be bought and sold quite cheaply. This is an example of how the most valuable gemstones might well be high volume and low cost, rather than low volume, high cost stones like diamonds.
Overall, investors, traders and miners and consumers will have different considerations when considering the value of any given gemstone. You should do always do your research when considering investing, and be especially careful to check the relevant certification of any stones you are buying.
Estimating the value of types of gemstones is notoriously difficult, while individual stones of the same carat weight can vary dramatically depending on how well they are cut or the tiniest differences of colour and clarity.
Marcus Briggs, of Icon Gold and Citi Group, is a highly successful entrepreneur and senior executive in the gold markets in the UAE, Africa and South America. Here he shares his knowledge and expertise on gold trading and investing.