The story begins in the late 1980s when a woman in West London spotted a cheap piece of costume jewellery at a car boot sale. She bought the sparkly ring for "a tenner" and wore it on her finger for the next 30 years. One day she casually showed it off to a jeweller, who told her it looked like a white diamond and was probably worth more than £10. It was probably worth £100,000.

Well, you can guess what happened next. She took it to Sotheby's to be valued and the auction house informed her it wasn't costume jewellery at all, but a rare cushion-cut 26.29-carat diamond from the Golconda mine in India. It fetched £656,750 at a Sotheby's auction in London last year.

But the story doesn't end there. Earlier this year, the anonymous buyer of the diamond sold it to Australia's very own Musson Jewellery, in Sydney. The jeweller had bid for it at the auction but missed out. Musson has fashioned it into a necklace, marrying it with another rare jewel, a 0.750-carat purplish pink diamond from the Argyle diamond mine in Western Australia, and five carats of smaller Argyle pink diamonds. That piece was unveiled at a private showing in late September and is now for sale for $3.3 million.

Everyone loves a good hidden treasure story, not least buyers of rare and fine gemstones, who are turning to the secondary market in the hopes of picking up a one-of-a-kind piece of jewellery to call their own. Call it the Antiques Roadshow effect, perhaps, but local auctioneers say the appeal lies in the provenance and romance that often accompanies these rare finds.

Adrian Dickens, a fine jewellery and silver consultant at Shapiro, who also runs Circa AD Jewels, says there is adventure to be had for the auction house in tracking down such pieces. He recalls being handed a box a few years ago containing a beautiful brooch and matching pair of earrings that were probably made in the United Kingdom in about 1890.

Historical interest

"We were able to do quite a bit of research because they were of historical interest," says Dickens. "They were given to the owner's great-grandmother, who handed them down to her daughter when she was 21, along with a letter. They lived in a house in Adelaide called Ayers House, which is still there, and of course it was the Ayers family – that's how Ayers Rock got its name.

"It's those sort of historical things, and particularly Australian things, that I find very interesting."

While stories like that of the "tenner" diamond are few and far between, they do exist. There is the now-famous 12.92-carat Kashmir sapphire ring consigned in Australia by Bonhams. Apparently valued by another local auction house at $5000 to $7000, it sold at Bonhams' May 2018 Rare Jewels & Jadeite sale in Hong Kong for $HK3.7 million ($650,000).

Bonhams will auction another rare Kashmir sapphire from Australia with a romantic story at its Rare Jewels & Jadeite Auction in Hong Kong on November 25.

It was inherited by the vendor from her grandmother, who bought it on a grand world tour she undertook with her sister to get over her heartbreak at losing not one but two husbands in tragic circumstances – the first in World War I, the second to Spanish flu.

The family is unsure how she acquired it, and had no idea it was valuable until the vendor offered it to her son to use in an engagement ring and he decided to have it certified at the Gem Studies Laboratory in Sydney. Weighing 6.71 carats, it has an auction estimate of $HK2.2 million to $HK2.8 million.

John Albrecht, managing director and head of private collections at Melbourne's Leonard Joel, which last year auctioned The Kozminsky Collection, tells the story of a loose pearl that was rolling around in a box of costume jewellery for half a century before it was brought in by two brothers who were blithely unaware of its value.

The Leonard Joel team suspected it was valuable and ran it over to the hospital across the road to have it X-rayed. The single, naturally formed pearl later sold for $146,000 – a record for a single pearl in Australia.

The process of consigning jewellery (whereby an individual takes it to an auction house to be valued and then sold under a legally binding contract) has not changed much over the years, although traditionally the jewellery would more often that not be sold to a dealer.

In recent years, however, the inclusion of the auction experience in television shows such as Sex and the City, not to mention media coverage of incidents such as the shredding of Banksy's Girl With Balloon during a Sotheby's auction in London in October, have helped raise the profile of auction houses.

"One of the big shifts we've seen in the last 20 years is that the auction has become more of a retail platform, more of a luxury scene than it was before," says Graeme Thompson, director of jewellery, Bonhams Asia, who helped uncover the Kashmir diamond. "And that's really opened up the market to consumers because it has given them an alternative to buying in retail, which was traditionally where buyers would go.

"The auction house is not this sort of dusty place to go any more. It's where you go for an evening sale and it's very glamorous and there are people kicking around who are very wealthy and very specific about what they want."

Hamish Sharma, head of jewels at Sotheby's Australia, says while families will often know the provenance of a certain piece and have an idea of what it is worth, an auction house can unlock the actual value, because a stone such as a sapphire comes in various grades.

"If the sapphire was mined in Sri Lanka, for example, at auction it would fetch $3000 to $5000 per carat. If it was mined in Burma, it'd be $15,000 to $25,000. And if it was mined in Kashmir it'd be $100,000 to $150,000," he explains.

"When families come to people like us, we are able to use our skills and knowledge and maybe call on the help of laboratories. We are then able to create value for them. And then of course at auction you get the provenance, and you could end up buying something that was worn by Marilyn Monroe, or was owned by a great collector."

The auction market also gives buyers the opportunity to choose unique pieces celebrating design and craftsmanship. "People are looking for pieces to acknowledge their individuality," says Sharma. "And of course they're chasing exceptional stones."

Additionally, jewellery is very emotional. "Through the ages jewellery has been acknowledged as being something very precious; in our culture it has been treated with a lot of respect," says Sharma. "If you've got something rare and valuable, that thread continues to weave it's way down generations." And, of course, there's the thrill of investing in something that might increase in value. Bonhams has seen significant price rises in gemstones in the past 10 to 15 years, driven in part by demand from Chinese buyers.

Mixed results

Which isn't to say that every piece of jewellery is worth something. Ronan Sulich, director and Australian representative for Christie's auction house, says jewellery brings its fair share of heartbreak. "Granny's necklace that has been stored in the bank vault since the 1920s is going to be sold to revive the family fortunes and it turns out all the stones are paste because she sold them years ago," he says.

It's the good stories that live on, however. Recalls Albrecht: "In the late 1980s I worked for the Leonard Joel family and this very elderly gentleman travelled down from the country with a fold-up wooden post-war bedside table. He was so hoping it was worth some money and it was worth nothing. I had to break it to him gently," he says. "He then said, 'Can I show you something else but I don't think it's worth anything?' He pulled out this miner's brooch which I knew was special and I put a $1000 to $1500 estimate on it. Well, it brought in $13,200, which was big money for a miner's brooch at the time. I remember him crying on the phone when I rang him up that night. It changed his life."

Auction fever

/ Sotheby's Australia conducts auctions in May, August and December each year for high-quality jewels and watches.

/ Shapiro has two, both in Sydney, one in April and one in October.

/ International house Bonhams holds fine and rare jewellery sales in Hong Kong in May and November and in New York and London in April, September and December, where pieces range in value from $US5000 to $US10 million. Among the star pieces on the block in Hong Kong on November 25 is a rare necklace of Chameleon diamonds in greenish-yellow hues, valued at $HK1.6 million to $HK3 million. Bonhams also holds rare jewellery sales featuring lower-valued consignments (pieces ranging from $US1500 to $US20,000) nine times a year in London and four times a year in Los Angeles.

/ Christie's biggest jewellery auctions are those in New York (April), Geneva and Hong Kong (May and November).

/ Local auction house Leonard Joel hosts four fine jewellery auctions a year in Melbourne, as well as weekly salon-style auctions featuring jewellery on Thursdays. Its next Jewels Auction is on November 26. It will include an antique suffragette brooch pendant featuring a deep-violet amethyst, found tucked away in a bottom drawer by a family whose great-grandmother was part of the women's movement at the turn of the 20th century (estimate $4000 to $5000). A Victorian pearl and diamond bangle and pendant belonging to an English socialite and later inherited by one of her relatives in Melbourne (estimate $20,000 to $30,000) will also go under the hammer.

Crown jewels of the auction houses

A royal treasure trove including jewellery owned by Marie Antoinette fetched 53.5 million Swiss francs ($73.5 million) in a November 14 Sotheby's auction in Geneva, smashing a pre-sale collection estimate of $6.18 million.

The top lot was an 18th-century natural pearl and oval diamond pendant with a bow motif, which the last queen of France would suspend from a three-row pearl necklace. The pendant soared to 36.4 million Swiss francs – which Sotheby's said was a world record for a pearl – after 10 minutes of bidding. The three-strand necklace of 119 slightly graduated natural pearls with a clasp of diamonds fetched nearly 2.9 million Swiss francs.

They were smuggled out of France by a loyal retainer before Marie Antoinette went to the guillotine in 1793.

The auction house spent 10 years securing the collection of 100 lots, spanning centuries of European history from the reign of Louis XVI to the fall of the Austro-Hungarian Empire.

The top lot sold to a private bidder, who asked to remain anonymous.

And on December 13, a 18.96-carat fancy vivid pink diamond fetched a record 50.3 million Swiss francs at Christie's Magnificent Jewels sale in Geneva. The Pink Legacy was bought by the US luxury jeweller Harry Winston, owned by Swatch.

"The saturation, the intensity of this stone is as good as it gets in a coloured diamond," Christie's international head of jewellery, Rahul Kadakia, said ahead of the auction. "To find a diamond of this size with this colour is pretty much unreal."

Among other rare pieces at the Christie's auction was a 1924 Egyptian Revival sautoir necklace by Van Cleef & Arpels, with diamonds, rubies, emeralds and onyx in platinum and gold.