Diamonds are colorless, right? That’s what most people think, until they see the Hope Diamond at the Smithsonian Institution. According to Jeffrey Post, curator of the National Gem and Mineral Collection at the museum, "It is the first colored diamond most people have seen." Until about 20 years ago, only cognoscenti knew that diamonds came in all colors of the rainbow. But they are rare: for every 10,000 colorless diamonds that are unearthed, only one colored diamond is found. This includes small gems, known as melee, as well as large, important stones. To find a fine example, one with an even saturation of color, is even more difficult. According to Benjamin Zucker in Gems and Jewels: A Connoisseur’s Guide (Overlook, 2003), "Perhaps one in a hundred thousand diamonds has a deep enough natural color to qualify as a ‘fine, fancy colored diamond.’"

Even though natural colored diamonds are rare, in the last few years they have become known beyond the circle of the privileged few, due in large part to publicity surrounding events such as the Academy Awards, where celebrities have been bedecking themselves with these glittering gems. In 2004 Halle Berry wore the Harry Winston 5.54-carat pumpkin-colored diamond ring when she received her Oscar. At the same event, Maria Menounos, host of "Entertainment Tonight," wore a diamond-studded dress created by designer Randi Rahm, embroidered with 2,000 brown diamonds totaling 3,000 carats that was valued at $2.5 million. And then there was the Harry Winston 6.1-carat pink diamond engagement ring that Ben Affleck gave Jennifer Lopez in 2002.

For most of history, colored diamonds were associated with royalty, particularly in Europe and India, where they constituted the cream of the collections of kings and maharajahs. In the 19th century, collectors such as Henry Philip Hope and the Duke of Brunswick amassed collections of colored diamonds, which were eventually dispersed, the Hope Diamond finding its way to the Smithsonian. In 1874, Tiffany & Co. bought a 30-carat lemon-yellow diamond from the Duke of Brunswick estate, known as the Brunswick Diamond, set into a peacock-feather ornament and proudly displayed it in their exhibit at the Philadelphia Centennial Exposition in 1876 (the present whereabouts of this stone are unknown). The following year, a rough yellow diamond weighing 287.42 carats was discovered in the Kimberley Mines in South Africa. Tiffany bought the stone and had it cut into a cushion shape of 128.54 carats with 90 facets to maximize its brilliance, naming it the Tiffany Diamond. It is still in the Tiffany collection, exhibited in a special case on the first floor of the firm’s New York store.

A diamond gets its color from minute amounts of trace elements that interact with the carbon atoms that make up the stone. Each element has its own hues. Nitrogen will result in a yellow or orange stone, which, with additional amounts, becomes deeper in color. Submicroscopic inclusions, such as graphite, block all transmissions of light, resulting in a black diamond. Boron creates blue and uranium yields green, while hydrogen produces pink, purple and red. According to François Curiel, chairman of Christie’s Europe and a veteran jewelry expert, "Rarely do imperfections add value. In the case of colored diamonds, it is ironic that the beauty and rarity of these gems comes from an impurity. While a perfect colorless diamond now trades at $100,000 per carat, the benchmark for the best colored diamonds has surpassed $1 million a carat and continues to rise."

What is so fascinating about colored diamonds? In market terms, the pivotal event that made everyone take notice was the sale of a 0.95-carat red diamond at Christie’s in April 1987 for $880,000; at $926,000 per carat, it was the highest price per carat for any gem. Until that day, the record for a diamond had been $127,000 per carat. The red diamond was purchased by a dealer, but the publicity it generated brought an awareness of colored diamonds not only to the trade but to collectors. It would take 20 years for this record to be broken—when last November, a 2.26-carat purplish-red diamond sold at Christie’s in Geneva for $2,664,900—or $1,179,160 a carat.

What does one look for in colored diamonds? All colored diamonds are graded for hue, tone and saturation. Hue indicates the purity of the color, the finest stones having no traces of secondary colors. Tone is a measure of the lightness or darkness of a stone, while saturation describes strength of color in terms of degrees of intensity; the terms are Fancy, Fancy Deep and Fancy Vivid, in ascending order of desirability. Fancy Deep describes stones of medium to dark tone and moderate to strong saturation while Fancy Vivid is a deep color with no traces of other colors. According to Thomas Burstein, Vice President, Estate Jewelry and Client Services, New York Salon, Harry Winston Inc., "The main concern for collectors is that the diamond shows its color; it has to be evenly dispersed." Alan Bronstein of Aurora Gems Inc. in New York states, "The colors of a diamond are not the colors that one would expect to see in other gemstones. A red diamond is not a ruby, traffic light or fire engine. It is more like wine."

There are those who are passionate about colored diamonds. Bronstein has assembled two unique collections. One, the Aurora Butterfly of Peace Collection, consists of 240 colored diamonds, arranged in the shape of a butterfly, that were assembled over a 12-year period. The stones, ranging from 0.09 to 2.11 carats for a total weight of 166.94 carats, show nearly the full spectrum of color and cut styles available for natural colored diamonds.