A rare red diamond failed to sell at a Sotheby’s auction in Australia earlier this week.

The oval-shaped red diamond is set in a ring flanked by two pear-shaped blue diamonds and surrounded by 12 round white diamonds.

Red diamonds are very rare indeed, the rarest of all diamond colours in fact.

The red colouration is thought to be due to structural anomalies caused by plastic deformation of the diamond’s crystal structure.

Anyway, this particular rare red diamond weighs 0.82 carats and comes with GIA & Gubelin certificates describing its colour as ‘Fancy Purplish Red”, as well as an HRD certificate describing it as “Fancy Intense Purplish Red”.

The diamond was orginally sourced from Australia’s Argyle mine and was sold in their ‘Pink Diamond’ tender back in 2005. Argyle claimed at the time that this is “one of only 13 diamonds to have sold in the Argyle Diamonds Tender over the last 5 years to contain a GIA description including Red”.

So it’s a definitely a rare gem.

But despite its rarity and all those certificates and immaculate provenance from Australia’s own Argyle mine, the diamond failed to reach its pre-sale estimate of A$700,000 – A$1,000,000.

In fact it failed miserably.

The bidding opened at $480,000 and only reached $490,000 – well below the lower estimate.

This comes as a something of a surprise given the recent record prices achieved at auction for rare fancy colour diamonds, including the rare blue diamond which sold in Hong Kong just last week, and back in 2004 a red diamond of a similar size (0.91ct) sold for just over $1 million.

Now I’ve got nothing against Australia and I mean no offence, but I reckon that prices approaching $1 million per carat for diamonds can realistically only be achieved at auction in a handful of world locations – New York, Geneva, Hong Kong, or perhaps via private sale in London, Moscow, or Dubai.

Perhaps Sotheby’s need to cast the net a bit wider to get this one sold…