Art Market Bubble Bursting – Gauguin Collapses 74% To $22 Million

by Mark O’Byrne, GoldCore:

– Art Market Bubble Bursting?
– Russian Billionaire Takes 74% Loss On “Investment”
– $85 Million Gauguin Bought By Dmitry Rybolovlev in 2008
– Christie’s auctioned the work at its evening sale in London
– Global art sales plummet, but China rises as ‘art superpower’
– China soon to dominates global art and gold market
– Art price volumes doubled since 2009
– As currencies debase super rich seek out stores of value
– Gold remains accessible store of value for all
– Stocks, bonds and many assets at record prices
– Gold half it’s real price in 1980

Russian billionaire Dmitry Rybolovlev paid €54 million or $85 million for a landscape by Paul Gauguin in a private transaction in June 2008. Yesterday, he incurred a whopping 74% loss on his store of value “investment” as reported by Bloomberg:

Gauguin’s 1892 landscape “Te Fare (La Maison)” fetched 20.3 million pounds ($25 million), including commission, at Tuesday evening’s sale of Impressionist and modern art at Christie’s in London. Rybolovlev will net about $22 million based on the hammer price. The auction house had estimated the value at $15 million to $22.4 million. The buyer was a client of Rebecca Wei, president of Christie’s Asia.

The Gauguin was one of four Rybolovlev pieces offered for sale on Tuesday. Another work, a Mark Rothko painting, will be auctioned March 7.

Rybolovlev — with a fortune of about $9.8 billion according to the Bloomberg Billionaires Index — invested about $2 billion in 38 works, from Leonardo da Vinci to Pablo Picasso. They were procured privately by Swiss art dealer Yves Bouvier, known for creating a network of tax-free art storage warehouses in Singapore and Luxembourg.

Two years ago, Rybolovlev sued Bouvier, alleging he was overcharged by as much as $1 billion, Bloomberg reported. Since then the Russian fertilizer magnate has been unloading works he acquired, some at record prices. He has already sold three for a loss totaling an estimated $100 million. The five works at Christie’s, all estimated below their purchase prices, were expected to deepen the loss.

The art industry is closely watching the London auctions running this week and next as the year’s first test of the global market following a significant contraction in 2016. Christie’s sales fell 17 percent to $4 billion pounds ($5.4 billion) last year, while Sotheby’s reported a 27 percent decline to $4.9 billion. Both houses saw steep declines in their two biggest categories: Impressionist and modern art, and postwar and contemporary art.

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