Pink diamond could set record: $27 million anyone?

GENEVA – A rare pink diamond goes on auction next week — and Sotheby's says the gem could set a new world record if it sells for its estimated price of $27 million to $38 million.

The 24.78-carat gem, described as "fancy intense pink," would top the previous record set by rival auctioneers Christie's when they sold the blue 35.56-carat Wittelsbach-Graff diamond for $24.3 million in 2008.

"This is undoubtedly one of the most important diamonds to appear at auction in recent years," David Bennett, the head of Sotheby's jewelry division, told reporters in Geneva.

Potential buyers have already taken a strong interest, he said. "It's been very, very well viewed."

Diamond experts said Sotheby's price estimate was ambitious.

"The trade price is probably around $750,000 a carat," said Martin Rapaport, whose Diamond.Net is a leading source on diamond trading and pricing. That would put the sales price at about $18.6 million, not including auctioneer's commission and sales tax.

"A good price is a million a carat. I think only a consumer is going to pay that," Rapaport told The Associated Press from his office in Israel.

Still, several factors could drive up the price.

First is the rarity and exceptional beauty of the stone, which has remained off the open market since it was sold 60 years ago by New York jeweler Harry Winston. Unusually for a pink diamond, it has a classic emerald cut with gently rounded corners. Sotheby's says it has a flaw unnoticeable to the naked eye, but may be graded internally flawless after re-polishing.

"It's a beautiful stone," said Rapaport.

Economics, too, might play a role.

Economic and political uncertainty is prompting the super-rich with significant disposable income to look for places to keep spare cash safe. In addition to gold, jewels and unique objects of art are considered attractive investments when currencies are sinking.

"There's going to be inflation eventually," said Rapaport. "It's not that the diamonds are necessarily going up, but that the dollar is expected to go down."

There's also the attraction, for some, of being seen as a person who can afford to drop $25 million on jewelry, he said.

"It wouldn't surprise me if we see a lot of people doing a lot of bidding at this auction," Rapaport said.