The COVID-19 pandemic brought about unprecedented changes in the valuation of colored gemstones, especially high-value rubies. Interviews with key players in the gem trade, combined with observations of the shifting market, reveal that the rise in gemstone prices during this period was unparalleled. A Bangkok-based gem dealer highlighted the impact of the pandemic on his business, noting that the prices he once charged for his inventory in Bangkok were no longer sufficient to replace those stones at their sources. From March 2020 to mid-2021, the price of gemstones increased by approximately 50%.
Gemfields, a leading gemstone mining company, reported record-breaking sales at their recent auctions, with Montepuez Ruby Mining (MRM) Limitada’s ruby auction generating an all-time high of $88.4 million USD. The auction, which featured in-person and private viewings in Bangkok, Dubai, and Jaipur, saw prices exceed those of previous auctions by 35% to 50% within a mere six months.
The COVID-19 pandemic disrupted nearly every facet of the gemstone industry, including excavation, cutting, retail, and marketing. Labor shortages, particularly in African countries like Madagascar, alongside rising costs of fuel, equipment repair, and replacement, have significantly impacted mining operations. Additionally, the lockdowns of gemstone cutting centers during the pandemic, coupled with supply chain disruptions, have further strained the industry.
The forced shift to digital platforms for retail, auctions, and sales—a traditional in-person industry—has also contributed to rising prices. While challenging for many in the industry, the increased online visibility has broadened the market and driven demand and prices upward, despite ongoing supply chain issues.
Another key factor affecting high-value gemstone supply is the imposition of U.S. sanctions on Myanmar’s gem mining industry. These sanctions effectively banned Burmese gems and may prompt global luxury brands to distance themselves from Burmese rubies and sapphires, further tightening supply and driving up prices.
The value of Mozambique rubies has seen a substantial increase, with prices rising by at least 50% in the last three months alone. Gemfields’ transition to an online auction platform has expanded participation, attracting both experienced and inexperienced buyers, leading to aggressive bidding and further price escalation.
Investing in high-value colored gemstones has proven to be highly lucrative for those who viewed gemstones as hard assets. The distinction between liquidation value—what one might quickly obtain in a forced sale—and insurance value—the replacement cost—has become increasingly blurred. As market forces continue to drive prices higher, it is anticipated that today’s insurance values may become tomorrow’s liquidation values. If current trends persist, this shift could occur sooner rather than later, underscoring the continued appeal of gemstones as a secure and appreciating asset class.
