The seventh edition of the Frieze Art Fair, featuring 165 contemporary galleries from 30 countries, opened in Regents Park this morning to an elite crowd of collectors and art world types.

It was almost night and day compared with a year ago, when the world financial crisis and global equities meltdown was fresh enough to kill any semblance of commerce. This year, the mood felt better, and a slight aroma of optimism was even detected in the air.

But forget about a complete recovery — or a firm belief that the market has hit bottom. The yellow caution light is still flickering, and the old, (and some might think) glory days of the contemporary bubble are still a thing of the past.

“There’s a much broader spectrum of cautiousness,” noted one wary observer, who also expressed surprise at the seemingly quiet atmosphere at the 11 a.m. preview for first-rank VIP visitors, which traditionally gives them a nice head start on the less fortunate (or less prominent) ones admitted at 2 p.m.

That kind of mind-the-gap delay would have been deadly during the boom times, but no longer. It really seems that people are taking their sweet time to pull the trigger.

“I haven’t bought anything yet,” said New York private dealer Alberto Mugrabi, standing outside the big Gagosian Gallery booth. “I’m waiting.”

Mugrabi said he liked Behenoyl Choloride (2006), a 108-inch square Damien Hirst spot painting hanging in Gagosian’s stand, but it seems he’s only willing to put so much money where his mouth is. “They’re asking $900,000, and I made an offer of $600,000 and it didn’t happen,” he said. “We’re trying, but it’s still in between the bid and the asked [price].”

Hirst has gotten massacred in the British press for his debut of new, solo-produced paintings at the Wallace Collection, but that didn’t bother Mugrabi, who found them “just great.”

Philip Hoffman, head of London’s Fine Art Fund, was also taking a hard-nosed bargaining approach. “Everybody is looking for discounts, and I’m still finding the prices a bit high,” he said. “Dealers are saying, ‘Well, make me an offer.’ ”

Surprisingly, there seemed to be plenty of Americans about, certainly more than last year, though some of that spike has to do with the draw of the top-name museum openings for Ed Ruscha at the Hayward Gallery and John Baldessari at Tate Modern.

Chicago über-collector Stefan Edlis was an early arrival, as was Connecticut hedgie David Ganek, who strode the halls with New York–based adviser Sandy Heller.

Mumbai/London collector and former Christie’s CEO Christopher Davidge was also in the first tranche of tire-kickers, passing by Anish Kapoors gold-plated and stainless-steel Turning the World Upside Down (2009) at London’s Lisson Gallery, priced at £475,000.

Fashion legend Valentino took a quick look at Sigmar Polkes mammoth 2005 painting With Potemkin Through the Villages, priced at €2 million ($3.2 million) at the booth of New York/Cologne gallerist Michael Werner, while New York investor Glenn Fuhrman sped past the White Cube booth, where Anselm Kiefers mural-sized photograph Kathedral (2007), from an edition of six, had already sold for $750,000.

At London/Zürich/New York gallery Hauser & Wirths booth, another Indian artist was making brisk waves. Three of an edition of 10 (plus two artist proofs) of Subodh Guptas 9-inch-high Et tu Duchamp (2009), a mini-version in black bronze of the larger work on view in the gallery’s Old Bond Street space, had sold in the opening hour or so for €120,000 each.

Back at Gagosian, a number of advisers and collectors were eyeing the new, porn-inflected Richard Prince paintings, Mumbai After Dark and Tijuana after Dark, both being offered in the $400–500,000 range. The gallery had already sold at least two Franz West aluminum sculptures in the $170–200,000 range and a modestly scaled, untitled Cicely Brown painting from 2009 in the $100–150,000 range in its “back room” salon.

“All the right people seem to be here,” said London/New York private dealer Wendy Goldsmith, but dealers, she added, “haven’t yet come to terms with the new price reality. The prices they’re asking are so extraordinary.”

And buyers appear to be responding by favoring midlevel works, priced, say, under $100,000, which are making a comeback after an uncertain year, at least at first glance.

Seoul’s Kukje Gallery had seen three sales in the $20-50,000 range, according to gallery President Tina Kim: Kira Kims Killed Pinocchio by Super Animals (2009) in bronze with wooden plinth; Gada Amers The Pink RFGA (2009), which not so subtly depicts three female figures masturbating in acrylic and embroidery on canvas; and Gimhongsoks The Thinker Regarding an attitude intending to intellectual equality, depicting a bent-over, shrouded figure in cast resin and tempered glass, in an edition of three.

“Life is getting better,” said Kim.

New York dealer David Zwirner also noted an uptick in the middle market (which he characterized as “under $100,000”), saying it’s “not fully back but is coming back. People are buying again.”

By midafternoon, the gallery had sold a number of Francis Alÿs works, including Bolero (1996-2007), a major animation work in video from an edition of five complete with a set of six drawings, for $250,000; three unique painted photographs from the 1999 series “Walking a Painting, London,” at $25,000 apiece; and two “Untitled, Tangier” paintings, from 2007 and 2008, both in pencil and oil on panel, for $70,000 apiece.

Zwirner’s team also sold a Mamma Andersson painting, Sink (2008), in mixed media on paper, for $40,000, and a Marcel Dzama painting for $12,000.

So far, no one had pulled the trigger for Wonderland (2007), the massive Luc Tuymans painting priced at €1.4 million. At 149 by 215 inches, the ode of sorts to the Alice and Wonderland attraction at Disneyland is his largest painting to date.

For the moment, it seems, less is more: At New York’s Marianne Boesky Gallery, all but two of Barnaby Furnass installation of 14 brilliantly executed watercolors covering the tumultuous life of 19th-century abolitionist John Brown had sold during the VIP preview, at $25–30,000 apiece.

“Eighty percent of the buyers were new to us,” said Boesky’s Adrian Turner, who added, “You can’t do these general booths anymore, you have to set yourself apart and do either a single theme or a single artist. It’s totally the way to go.”

Judd Tully is Editor at Large of Art+Auction.

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