Sotheby's auction marks new high for HK gem trade

A model holds a flawless 118.28-carat white oval diamond during a media preview at Sotheby's auction house in Hong Kong on September 19, 2013.

A Hong Kong auction house on Monday witnessed the sale of a white diamond the size of a small egg, fetching a cool thirty-point-six million U.S. dollars. The sale edged out the previous record for such a stone set just six months ago.

Sold in Hong Kong. The world's largest white diamond goes on the block in a record auction, in a city known to be a center for jewelry sales rivalling Geneva and New York.

"Yes, it's just amazing. It looks like a huge diamond egg. It is the largest ever to be graded. It is also the largest diamond to be sold at auctions. So it comes with a little more emotional content than just normal purchases and of course big white diamonds like that I mean it is that and part of your wealth portfolio." Quek Chin Yeow, chairman of Sotheby's International Jewelry Asia said.

Diamonds accounted for 30 percent of China's jewelry sector this year, up from 25 percent in 20-08, according to research firm Euromonitor. It's a trend that's likely to continue, says CLSA investment analyst Mariana Kou.

"Gold is traditionally the more preferred category in the jewellery segment but we are definitely seeing a rising demand for diamonds, partially it's because of the Westernized culture. They watch movies and they study abroad. That is becoming a big culture and engagement ring has never been a big category in China but it's growing especially in coastal cities." Mariana Kou, investment analyst of CLSA said.

Tiffany & Co is witnessing that China sparkle. Strong demand from Mainland customers helped lift the U.S. jeweller's global sales, leading it to raise its profit forecast for the year. That helped make up for some disappointing business in Tiffany's home market, the U-S.

The U.S. jeweller's name also got a boost in China with the Mainland screening of U.S. film "The Great Gatsby", where Tiffany designed jewellery for its leading stars.

The diamond auctions aside jewellers, investors and collectors can only hope the sparkle stays on, even after all the hype is gone.