It's easy to get jaded when you follow postwar and contemporary art auctions. ("Disappointing," a dealer muttered last November when a painting sold for $600,000 at Phillips in New York—three times the average annual salary of a U.S. pediatrician.) The top prices at this year's London evening auctions at both Sotheby's and Christie's, however, were enough to jolt even the most complacent art observer. One hundred twenty-two artworks fetched about $366.7 million in sales.

The biggest sale of the week was at Sotheby's, when a painting by Gerhard Richter sold for $46.3 million. At times, bidding for the almost 10-foot-tall Abstraktes Bild felt more like a tennis match than an art auction, as people literally gasped, oohed, and, finally, clapped.

The auctioneer started bidding at 14 million pounds, raising it in 250,000-pound increments, and then clearly one phone bidder got impatient, because the price jumped 2 million pounds. But the other bidder matched it (“oooh”), and the numbers continued to rise in 1 million- and 2 million-pound increments ("ahhh"), until it settled at a hammer price of 27 million pounds (excluding the buyer's premium, which tacked on another 3.3 million pounds or so).

There was concern going into the sales that they were largely two-dimensional, with just a few big names crowding all of the top lots. Saturation was a worry.

In a sense, that's true: Three of the top 10 paintings this week were by Gerhard Richter, two were by Francis Bacon, and two were by Jean-Michel Basquiat, but it turns out there was no need to fret. Intense bidding by a variety of collectors showed there was a real depth to the market, which is a nice way of saying that a lot more people want top lots than there are top lots available. (There were apparently 12 telephone bidders for a red painting by Lucio Fontana that sold for $2.7 million at Christie’s.)

David Fuller's view

The contemporary art market is an excellent gage of confidence within the more developed portion of the global economy. 

One or two auction results are not decisive indicators, of course, but my impression is that the trend in this market is strengthening.  For sure, appreciating contemporary art prices are not an indicator of destructive deflation (lower sales, prices and profits).  In fact, technology driven positive deflation (higher sales, lower prices and rising profits) is probably providing some of the new wealth entering the contemporary art market.   

If you like contemporary art, do not miss the stunning work from this auction: Gerhard Richter, Abstraktes Bild.