Investment-Grade Gemstones: Historical Prices and Trends

by Ken Rock, MSDC Editor

For centuries, the world's finest gemstones have served as both objects of beauty and stores of wealth. From ancient maharajas to modern investors, people seeking to preserve and grow their wealth have turned to these extraordinary natural objects.

I recently came across an old item I cut from the San Francisco Examiner/ Chronical in 1980. I don’t recall exactly why I clipped it, but the topic of gemstone values was interesting to me back then and still is today. Motivated by that clipping, I looked into the very interesting history of investment-grade gemstone prices and some of the factors that have driven their remarkable price appreciation. The mind-boggling prices attained for some very high-end gemstones are documented in the photos and descriptions below.

Sunrise Ruby (25.59 carats): $1,266,901 per carat (2015)

A Sotheby’s employee shows a Superb and extremely rare ruby and diamond ring by Cartier, with a Burmese ruby weighing 25.59 carats, which was estimated to sell between $12 million to $18 million US dollars during a preview at the Sotheby’s auction house in Geneva, Switzerland, Wednesday, May 6, 2015. The auction took place in Geneva on May 12, 2015. Photo from Martial Trezzini/Keystone via AP.

Graff Ruby, (8.62 carats): $997,727 per carat (2014)

A model wears the "Graff Ruby" a red hue "pigeon blood" Burmese stone during an auction preview Sotheby's auction house in Geneva, in this November 5, 2014 file photo. Photo from REUTERS/Denis Balibouse/Files.

Blue Belle of Asia (392.52 carats): $17.3 million total (2014)

The sapphire known as the Blue Belle of Asia set a new world record after selling for more than $US17 million at a rare jewelry auction in Geneva. The 392.52-carat gem was snapped up by a private collector, the highest ever for a sapphire at auction, Christie's says.

Richelieu Sapphires (26.66 and 20.88 carats): $8.3 million total (2013)

Two cushion-shaped sapphires, weighing 26.66 and 20.88 carats respectively, of Kashmir origin with no indications of treatment. These exceptional gemstones were given to Odile de la Chapelle de Jumilhac de Richelieu (1879-1974) as a wedding gift on the occasion of her marriage to Count Gabriel de la Rochefoucauld, Prince de la Rochefoucault, in 1905. They have been remounted only three times since then, their current design is a contemporary creation by Cartier incorporating their famous lily-of-the-valley motif which the house first used around the time the sapphires were originally given as the handsome wedding gift.

Patricia Emerald (632 carats): Museum specimen (invaluable)

Measuring just over 2.5 inches tall, the 12-sided Patricia Emerald is among the world’s most magnificent uncut emeralds. The 632-carat crystal group weighs about 4.4 ounces, and is the largest example recovered from the Chivor Mine in Colombia, one of the world’s most renowned emerald-producing countries. Found in Colombia in 1920, it was named after the mine owner’s daughter. Because of their value, most emerald crystals of comparable size have been cut into gems and sold commercially. “Only a small number of large emeralds have been saved, and we are indeed lucky to have one of the fabulous few,” says George Harlow, curator at the American Museum of Natural History. 

Rockefeller Emerald (18.04 carats): $305,516 per carat (2017)

The Rockefeller Emerald: an emerald and diamond ring, by Raymond C. Yard. Set with an octagonal step-cut emerald of approximately 18.04 carats. Estimate: $4-6 million.

Recent Price Appreciation

Gemstone values are not correlated to financial markets and are resistant to inflation. Unlike gold and, to a large extent, mineral specimens, gemstones have a very high value-to-size ratio and are easy to transport.

To high net worth (and ultra-high net worth) individuals, gemstones offer a discrete way to store wealth, a factor that contributes to an expanding base of wealthy collectors internationally, including the emerging markets, especially in China and India.

An investment in precious colored gemstones can act as a hedge against inflation and can stay relatively unaffected in volatile markets. In fact, investors who once considered them to be too low-yield or risky are now using them as an attractive hedge against inflation and/or an economic downturn.

The graph below shows that from 2020 to 2023, appreciation in the prices of sapphires, emeralds, rubies, opals, pearls, and tourmalines beat the S&P by substantial margins. At the same time, natural diamond prices have declined and are now dropping at extraordinary rates.

3 year CAGR
Source: Angara internal research and purchase prices for "investment grade" gemstones, defined as "Heirloom (AAAA) quality." Angara is one of the largest buyers of colored gemstones in the world. Angara buys gemstones in the form of rough or wholesale polished from leading mines and manufacturers.

The chart also shows that the rapid increase in investment-grade pearl, opal and tourmaline values (less well-known and relatively more illiquid gemstones with smaller markets) are experiencing even higher appreciation than gemstones sold in much larger volumes, such as sapphire, ruby and emerald. Without the discovery of new mines for some of these gemstones, the supply is expected to decrease further.

Historically, diamonds were the go-to item for investment grade gemstones. However, the recent turbulence in the diamond market has caused investors to look towards colored gemstones.

A Shift in Investor Mindset about Diamonds

The decline in natural diamond prices over the last couple of years has been largely driven by the proliferation of lab-grown diamonds, which are chemically, physically, and optically the same as their natural-mined counterparts, but available at a fraction of the price. Contributing to this trend was a ruling by the Federal Trade Commission in 2018 that lab grown diamonds were in fact diamonds, further impacting diamonds as an investment. More precisely, the word “natural” was removed from the FTC’s definition of a diamond, meaning that lab-grown diamonds were not viewed as synthetic, and could be marketed as diamonds as long as they were described as lab grown (or equivalent language). This increased the demand for lab grown diamonds overnight. 

Photo from Wedding Bands & Co.

The significantly lowered price of lab grown diamonds has placed tremendous pressure on their natural counterparts, making investors increasingly wary. In contrast, we are seeing record-setting auctions in colored gemstones at Sotheby’s and Christie’s where investment grade colored gemstones are selling for far above the high estimates.

Increasing Interest Among Younger Consumers

The demand for colored gemstones is growing not only on the upper end of the cost spectrum, but also among younger customers with more realistic, real-world budgets. A study conducted by MVI Marketing in 2020 found that colored gemstones capture more attention with younger consumers interested in buying precious stone jewelry for both lifestyle and fashion reasons, as well as for engagement and wedding purposes. Over 93% of the more than 1,100 U.S. jewelry consumers polled said that they love sapphire, ruby, and emerald. More than 40% recently purchased these gems, and nearly 70% said it is likely that they will buy them in the next two years.

Market Dynamics

As wealth has grown globally, particularly in Asia, competition for the finest stones has intensified. Colored gems are increasingly seen as portable stores of wealth, particularly in uncertain economic times. Their value and portability (millions of dollars in a piece small enough to fit in your palm) makes them attractive to high-net-worth individuals.

Diamonds and colored gems come in an array of shapes, colors and sizes. Photo from London DE Group.

The value of colored gems is further enhanced by their dual nature as both aesthetic treasures and investment vehicles. Unlike many investments, they can be worn and enjoyed while potentially appreciating in value. This combination of beauty, rarity, portability, and historical significance creates a powerful value proposition that continues to drive prices upward for the finest specimens.

Understanding these characteristics helps explain why truly exceptional colored gems can command prices that seem astronomical to outsiders. When multiple positive factors align – exceptional color, significant size, high clarity, prestigious origin, lack of treatments, and documented provenance – the resulting gems represent the pinnacle of what nature can produce, and their prices reflect this extraordinary convergence of desirable traits.

The Tiffany yellow diamond worn by Lady Gaga to the Academy Awards in 2019 was bought by founder Charles Lewis Tiffany in 1878 from the Kimberly diamond mines in South Africa. It was cut from a rough of 284 carats down to 129 carats and is one of the largest yellow diamonds in the world. At the event, Gaga won the Oscar for Best Original song for 'Shallow' that she sang with Bradley Cooper in the film 'A Star is Born.' Photo from Getty Images.

Historical Perspective

The Early Modern Market: 1900-1950. At the beginning of the 20th century, the gemstone market operated very differently from today's global marketplace. During this period, exceptional gems primarily changed hands through a small network of dealers and royal courts. International trade networks were unsophisticated, traditional mining regions dominated the supply, and there was only minimal formal documentation and certification.

At that time, fine rubies from Burma's Mogok Valley were considered the world's finest and sold for approximately $100-200 per carat (equivalent to $3,000-6,000 in 2024 dollars). Kashmir sapphires, just beginning to gain international recognition, commanded similar prices. Colombian emeralds, with their centuries-old reputation, typically traded in the range of $50-150 per carat.

Post-War Transformation: 1950-1980. The post-World War II period brought significant changes to the gemstone market, including the emergence of international auction houses as major players, development of modern grading standards, and increased interest by private collectors beyond royalty. Organizations such as the Gemological Institute of America (GIA), the Swiss Foundation for the Research of Gemstones (SSEF), and Gübelin provide authoritative grading, enhancing buyer confidence. Their reports detail treatments, origin, and quality characteristics - critical factors affecting value.

It was during this period that prices began their first significant upward trend: fine Burmese rubies and Kashmir sapphires reached $5,000-10,000 per carat and top Colombian emeralds sold for $3,000-8,000 per carat.

The Modern Era: 1980-2000. The late 20th century saw the gemstone market begin its transformation into a true alternative asset class. Driven by the introduction of sophisticated certification systems, growth of organized trading networks, and more comprehensive market documentation, prices continued their skyward trajectory, especially for exceptional stones. By the year 2000, top Burmese rubies sold for $50,000-100,000 per carat, fine Kashmir sapphires sold for $40,000-80,000 per carat, and premium Colombian emeralds sold for $30,000-60,000 per carat.

The Contemporary Market: 2000-2025. The 21st century has seen unprecedented price appreciation for investment-grade stones, driven by multiple factors, including closure of historic Burmese ruby mines, exhaustion of original Kashmir sapphire deposits, and reduced production from other traditional sources.

Regulatory changes such as stricter mining regulations, stronger environmental protection requirements, and more recently, an increased focus on ethical sourcing all affected the supply of investment-grade gemstones. These factors, coupled with rising extraction costs and political instability in mining regions, all have contributed to rising prices.

Final Notes

Perhaps even more than with traditional investments, such as stock, bonds, and real estate, the value of gemstones is influenced by a wide variety of factors and is not easy to determine.

The factors and their relative influence on colored gemstone value, according to Josh Hall, Vice President, Pala International, Inc. Illustration: Al Gilbertson, GIA.

The mineralogical characteristics of gemstones (e.g., color, clarity, size, cut, treatment) form the foundation of their value proposition as investments. These inherent properties, combined with market forces (e.g., rarity, provenance, certification, changing consumer preferences, and historical significance), continue to drive the evolution of gemstone prices in the global market.

Even when purchasing from a reputable dealer, a buyer will pay a substantial markup over the wholesale price which is why a long-term perspective is needed for any gemstone investment. However, even without considering an investment, the beauty of these exceptional natural objects, combined with all of those factors mentioned above, offer a very broad and deep field of study for anyone wishing to pursue these topics as an intellectual pursuit.

And speaking of intellectual pursuits, please think about colored gemstones, including diamonds, if you are looking for a topic to write about for this newsletter. Your input would be welcome!