A giant 59.60-carat pink diamond has become the most expensive gem ever sold at auction, fetching $71.2 million at Sotheby's in Hong Kong today.

Sotheby’s had earlier estimated the diamond, known as The Pink Star, could fetch up to $60 billion, on the back of unprecedented demand for fine gems. 

Reports said that Hong Kong-based jewelry retailer Chow Tai Fook bought the diamond wining a three-way contest by phone bidders, for HK$553 million ($71.2 million), including the buyer's premium, or auction house charge.

The Pink Star is the largest Internally Flawless Fancy Vivid Pink diamond that the Gemological Institute of America (GIA) has ever graded and it led the Sotheby’s sale of magnificent jewels and jadeite in Hong Kong. 

A little over three years ago, Sotheby’s sold The Pink Star for a record $83 million in Geneva in November 2013, but the buyer, New York-based diamond cutter Isaac Wolf, could not pay up and defaulted, leading to Sotheby’s reacquiring the stone.

The Pink Star has been found to be part of the rare subgroup comprising less than 2 per cent of all gem diamonds - known as Type IIa: stones in this group are chemically the purest of all diamond crystals and often have extraordinary optical transparency. Mined by De Beers in Africa in 1999, the 132.5-carat rough diamond was meticulously cut and polished over a period of two years and transformed into this stunning gemstone. 

The previous record for the most valuable diamond ever sold was held by The Blue Moon of Josephine, a 12.03-carat cushion-shaped Internally Flawless Fancy Vivid Blue diamond that sold for $48.5 million at Sotheby’s Geneva in 2015.