As the holiday lights illuminate city streets from London to New York, it is worth noting that the sparkliest rainbow in the world is currently on view in Old Bond Street, home to the highest density of gem palaces. Leviev, Chatila, Chopard and David Morris blaze with a fireworks display of coloured diamonds, while Graff, which holds more than 60 per cent of the world’s yellow diamond stock, appears to have displayed the entire reserve in one window alone.

 

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“The concentration of the world’s largest, finest coloured diamonds is in London now,” says Dorrit Moussaieff, owner of the eponymous shop and a legendary dealer of diamonds. “If you go to the Place Vendôme or Fifth Avenue you will see nothing like it.

Indeed, says Melvyn Kirtley, vice-president of Tiffany, “the sheer weight and number of coloured diamonds on this street does not take away from their rarity.”

“When talking about large, fancy stones, rarity cannot be underestimated,” agrees Daniel White, UK business director of the Diamond Trade Centre. “Only one in 50 of all the stones polished is more than 0.2 carats, and just one in 10,000 of all the stones found are fancy coloureds. Thus, if you are looking at a fancy blue stone of more than 5 carats, one in a million is an understatement.”

Of those one in 10,000 gem-quality stones, the four “Cs” (clarity, colour, cut and carat-weight) are assessed by the Gemological Institute of America to refine the market value of the diamond. The GIA estimates that only 4,000 carats of fancy diamonds are on the world market at any one time and a mere 50-60 carats of pink diamonds are mined in a year. As an indication of the rocketing prices for pinks, Moussaieff’s daughter Tamara recalls, “In 1982 I remember offering $1,000 per carat for a very nice pink diamond. That same diamond today would be worth at least $200,000 per carat.”

It is ironic that the nitrogen and boron atoms that create yellow and blue diamonds respectively were once considered impurities. Now – in order of rarity – red, orange, green, blue, pink and yellow diamonds lead the collectors’ market. They are considered “the world’s most concentrated form of wealth” and 24 of 25 of the highest prices paid at jewel auctions in the last decade were for coloured diamonds.

As Caroline Gruosi-Scheufele, co-president of Chopard, says: “There are only so many van Goghs in the world. The market now understands that you can probably not push more capital in a square centimetre and carry it around than you can in a coloured diamond.”

In 2006, Gruosi-Scheufele bought and sold a pear-cut, 6.20-carat, natural orange-coloured diamond that was larger than Harry Winston’s Pumpkin Diamond, which had previously toured the globe in The Splendor of Diamonds exhibition of the world’s rarest stones. Alongside the great private collections and museums, the houses of Bond Street possess an astonishing percentage of these most magical of diamonds – and they are for sale.

Though Gruosi-Scheufele expresses regret that “a big connoisseur and friend of mine bought the orange right off my finger”, she has grown equally attached to a 9.33-carat fancy deep blue VVS1 oval-cut blue diamond with a retail value of $700,000-per-carat, which she has set in 1.95 carats of pink diamonds.

Moussaieff’s Bond Street boutique contains jewels that are beyond the dreams of the most avaricious Saudi princess, despite the fact that her most important coloured diamonds – including what is arguably the rarest coloured diamond in the world, remain in her bank vault.

The Moussaieff Red, shown at the Smithsonian in Washington, DC, in 2003 and London’s Natural History Museum in 2005, is a 5.11-carat fancy red triangular-shaped diamond. As an indication of its rarity, the GIA has graded only five red diamonds and the Moussaieff Red is the largest. Holding and polishing the Moussaieff Red is rather akin to stroking the Mona Lisa’s cheek. Mined in the 1990s, the red has certainly had fewer owners than Leonardo da Vinci’s masterpiece. As an indication of its value, the Hancock Red was sold at auction in 1987 for $880,000 and that stone was a mere 0.95 carats. Today the Moussaieff Red could command more than $20m.

“We have been building a collection of coloured diamonds over a couple of years that is the largest in the company’s history,” says Tiffany’s Melvyn Kirtley. “But it’s important to note that these stones are not museum pieces. We want people who love these diamonds to wear them and enjoy them every day of their lives.” These include a 2.58-carat mint green emerald-cut diamond that is internally flawless: Kirtley describes it as “almost impossible in its rarity”.

Meanwhile, in the previous two years alone, Laurence Graff has acquired and sold magnificent yellow diamonds such as the Golden Star (101.28 carats), the Tsarina (90.14 carats), the Golden Maharaja (65.57 carats) and the 107.46 fancy yellow Rojtman Diamond. With oil prices booming, the treasure-loving Middle East and south-east Asia markets are hungry for stones of this quality but – as the jewellers will confirm – it’s the way they dress diamonds that truly sell these pieces.

A very important necklace has just been completed by the house of Graff, for example, that is an intricate filigree of the finest coloured diamonds – pinks, blues, cognacs and yellows of the subtlest hues. This waterfall of colour will sell for little short of $40m – and that’s before Graff adds a 70-carat baby pink pear-shaped diamond that abseils from the collar into the lady’s cleavage. Connoisseurs will recognise not only the million years it has taken to form the diamonds but the many years it has taken Graff to acquire a suite of stones of the precise colour and clarity required to create this necklace.

These connoisseurs will also be acquainted with the relatively new kid on the block, Leviev – a legend in the trade for its mining, cutting, polishing and selling of magnificent diamonds. Of the Leviev gems, only 2-3 per cent are used in the retail collection, such as the aforementioned fancy intense blue, one of a royal flush of diamonds held in Leviev’s London vaults. Then there’s the 50-carat fancy intense yellow diamond mounted as a ring and flanked by two D-flawless whites (£1.3m), and the 2-carat fancy dark green princess- cut diamond, one of 10 in the Leviev collection (£2.05m).

A curiosity in Leviev’s London collection is two chameleon diamonds. For collectors these mysterious entities are both oddities and essentials. They are yellow diamonds that turn an intense green once exposed to light and the smallest of them retails for £249,000. (Moussaieff holds a high-carat chameleon with her bankers.)

Though the market for truly exceptional coloured diamonds is traditionally the preserve of Saudi princes, Russian oligarchs and modern maharajahs, Moussaieff notes: “The market is not exclusively for six-figure clients. A half-carat pink is accessible even though they don’t exist in large quantities.”