Amid fears that the art market bubble is about to burst, diamonds are proving to be the auction houses' best friend. In the past month, they have fetched record prices in salerooms from Hong Kong to New York.

A stone described by Sotheby's as "the largest, purest, white flawless brilliant-cut diamond ever bought at auction" was sold for £7.9m last week to Georges Marciano, the founder of Guess Jeans, in Geneva (more about this at Guess Diamond ). It was the second highest price ever paid for a diamond at auction and the highest price per carat ever paid for a white diamond. Weighing 84.37 carats, the stone sold for £93,000 a carat.

Mr Marciano has called the jewel the "Chloe Diamond" after his daughter.

In the same week, Christie's in Geneva sold the largest red diamond ever to come to auction for a record price of £1.3m, £584,000 per carat. Red and green diamonds are extremely rare and command the highest prices, followed by blue diamonds.

Next month, Christie's is holding a jewellery sale in London, the centrepiece of which will be a flawless pear-shaped diamond pendant, weighing 17.62 carats, estimated at £800,000 to £1m. In the same sale, there are eight D-coloured diamonds (the purest colour) of which at least four are flawless.

David Warren, Christie's director of jewellery, London and Dubai, said prices for larger diamonds of four or five carats or above had increased by 40 to 60 per cent in the past two years and by 80 to 120 per cent in the past five years. "There isn't enough supply to meet the demand," Mr Warren said. "The diamond mines at the moment are not finding diamonds rough to cut very much over five carats."

He added: "The other factor is the increased demand from all around the world. We've got a lot of Russian buyers coming into the market. They are often spending a lot of money and buying diamonds for $1m or more. The markets in China and India are increasing and will help to sustain the growth.

"The great thing about jewellery is it is thought of as a commodity like gold and does tend to hold its value at times when the market takes a dip."

David Bennett, chairman of Sotheby's international jewellery division for Europe, who has sold all of the four diamonds to sell for more than $10m (£4.9m), agreed. "The large rough diamond is getting much more scarce."

The diamond cutting process is very unforgiving – the Chloe Diamond lost 28 per cent of its weight when it was brilliant-cut. "It was the paradigm of diamonds," said Mr Bennett.

The most expensive diamond, and indeed jewel, in the world, was the Star of the Season, weighing 100.10 carats, which Mr Bennett sold at Sotheby's Geneva for £8m in May 1995.

At last week's Sotheby's sale in Geneva, a diamond and emerald bracelet, which was a Christmas gift from Edward, then Prince of Wales to the Duchess of Windsor in 1935 sold for £486,000, more than three times the price it last sold for in 1987, when it fetched £171,000. A diamond bracelet by Van Cleef and Arpels, dated circa 1950, sold for £286,000, more than three times its estimate.

Other jewels which reached high prices at the Christie's Geneva November sale include a rare coloured diamond ring of 2.26 carats, which sold to the leading jeweller Laurence Graff for £1.3m, an emerald and diamond necklace from the collection of Princess Katharina Henckel von Donnersmarck, which made £876,000 and a pair of Van Cleef & Arpels diamond earrings and a brooch from the collection of Princess Cecil Amelia von Fürstenberg, which sold for £535,000 and £404,000 respectively.

In Hong Kong last month, Sotheby's sold a rare vivid blue diamond ring for £3.8m, while Christie's New York sold a 5.07-carat blue diamond for £1.4m and a rectangular cut 23.14-carat diamond ring by Harry Winston for £1.3m