Royal jewels, rare watches to test auction market

By Stephanie Nebehay

GENEVA (Reuters) - Auction houses offering royal jewels and rare luxury watches in Geneva next week shrug off any suggestion that the global economic downturn will dampen what they say is still a strong market for high-end pieces.

Christie's and Sotheby's are holding their spring jewelry sales in the Swiss city after two huge diamonds were stranded on the block at respective Hong Kong sales in April.

Senior jewelry experts at the companies voiced confidence that collectors and traders remained hungry for unique items, especially colored diamonds or historic gems, following world-record prices set for rare polished diamonds last year.

"There's a sub-prime crisis and thousands of bankers have lost their jobs, but this (art) market defies the laws of economics. Our sales are up six percent this year amid record prices," Francois Curiel, chairman of Christie's Europe, told reporters on Friday.

The Frenchman, who is also international jewelry director at Christie's, said there had been a "rush of new buyers including Russian, Chinese and Indians" in the past two years.

"People are looking to diversify their portfolios and our clients also see works of art as a hedge against inflation," Curiel told Reuters.

Christie's says its twin sales on May 14 boast a rare choice of large colored diamonds.

Its top lot is a 13.39 carat blue diamond, the largest blue diamond graded fancy intense in color ever to be auctioned, valued at $6-$8 million. A perfect heart-shaped yellow diamond weighing 21.40 carats could fetch 2.8 million Swiss francs.