For a long time, diamonds have remained to be the most desirable gemstones. Everyone dreams of getting their hands on them. For most buyers, price is a paramount factor when making a buying decision. Therefore, it is more than necessary for all diamond buyers to first understand how these stones are priced to know what they are paying for. So how are diamonds priced and what makes two quite similar stones still have different prices? First and foremost, it is worth knowing that diamonds are not all created equal. Every stone comes in a different size, shape, color, and other various internal characteristics. Diamonds with certain qualities are often considered more rare thus more valued than those lacking them. As with all the other products being sold, diamond prices are also affected by the value that is added at each level of its supply chain. To discuss and evaluate all these factors involved, jewelry professionals use a systematic grading system that was developed by GIA (Gemology Institute of America) in the early 1950’s. This system uses four important factors which include clarity, color, cut, and carat weight to describe and classify diamonds. In this guide, we will explore all the factors that affect diamond prices both positively and negatively.
The 4C's of Diamond Pricing
The Carat Weight Factor
If two diamonds have the same color, cut, and clarity but have different weight, you will realize that the bigger stone will always be more expensive. This is because these stones are weighed in carats and are sold according to the carat weight. Generally, one carat is equal to 0.2 grams. One thing that will surprise you is that the price of diamonds usually shoots up dramatically at around one carat. For example, the price difference between a 1 carat diamond and a 0.99 carat diamond will be considerably higher compared to the price between a 0.99 carat and 0.98 carat diamond. This also means that a 2-carat diamond will not be twice as expensive as a 1 carat diamond, but 3 to 4 times more expensive.
The Color Factor
Color is another major aspect of diamonds that greatly affect their price. Typically, all the different colors of diamonds lie within the grades D and Z – colorless to yellow or brown. Colorlessness in this aspect refers to the absence of brown, yellow or any other tints in the diamond. The closer the diamond’s color is to D, the higher it’s price will be. This means that the more colorless a diamond is, the more expensive it will be. Likewise, the more visible the tints come out, the cheaper the diamond is. Conversely, Blue, Pink, and other colorful diamonds are considered as fancy color diamonds and have a separate grading system that runs from Faint to Vivid.
The Clarity Factor
The clarity of a diamond refers to the measure of blemishes or inclusions in it. The clarity of these valuable stones ranges from flawless to those with obvious inclusions and is graded on an 11-step scale. Normally, those stones with numerous imperfections that are visible are sold cheaper. On the other hand, those that have fewer visible imperfections or none at all attract a higher price. Although some inclusions will be visible to your naked eye, there are some which will only be seen under magnification.
Cut Grade
The cut grade of a diamond refers to how well it’s facets interact with light. This element is very essential in determining a diamond’s final beauty and value. There are five categories of cut grades ranging from Excellent to Poor. Since this is the toughest characteristic to analyze, it must be done with the help of scientific tools.
Diamond Shape
While the cut of a diamond refers to how sparky it is, a stone’s shape is its geometric appearance. Diamonds can be square, round, or have other fancy shapes like a heart, pear, or marquise. Typically, round is the most popular and expensive diamond shape followed by square, rectangle, pear, and lastly oval and heart.
8 Additional Diamond Pricing Factors
We have looked at the 4c’s: cut, clarity, color and carat weight which are the classical variables that are used in diamond valuation. However, these are just the basic factors. When comparing diamonds in the market, you may still realize that the ones with the same carat weight, color, clarity, and cut still differ in price. So how is this possible? The reason for this is that there are other additional factors that are also taken into consideration when calculating the price of diamonds. With that, here are 8 other factors that will make two diamonds have very different prices despite having identical carat, cut, clarity, and color.
1. Polish
How smoothly polished a diamond’s surface is will also affect its price. Generally, diamonds with a higher polish grade are more expensive compared to those that have a lower polish grade. However, this factor has minor impact compared to the cut grade, particularly between the VG grade and the G grade.
2. Inclusions
The general rule of thumb for diamond inclusions is that the less visible and smaller the inclusion is, the more valuable it is. Those stone without inclusions that are visible to the naked eye are said to be “eye clean” and have a higher price. However, something interesting is that diamonds with the same clarity grade can still have varying levels of visibility in their inclusions. For this reason, their prices will slightly vary.
3. Fluorescence
Fluorescence of a diamond is how it responds when it is exposed to UV light. Actually, one third of all diamonds in the world when exposed to ultraviolet light will emit a soft colored glow (normally blue). While most fluorescence in a diamond will be invisible to the naked eye, a high level of it leads to a milky white appearance. Since fluorescence can make a stone appear hazy, its presence in a diamond usually lowers its value. However, there is an exception to this. For example, in those stones where the color gradient is H or lower, a certain level of fluorescence like Medium fluorescence will make it look whiter.
4. Symmetry
The symmetry of a diamond refers to how well-shaped its facets are and how symmetrical their positions are with relation to one another. Diamonds with a high symmetry grade are more expensive while diamonds with lower symmetry are cheaper. Just like polish, symmetry also has a very minor effect on the stone’s value in comparison to cut grade. Prices differences between the VG grade and the G grade are especially very small.
5. Girdle Thickness
When it comes to girdle thickness, those stones with very thick or very thin girdles are often discounted. The reason for this is that very thick girdles make a diamond’s proportions less than ideal while very thin girdles make a stone prone to chipping. This is why those stones with girdles that are neither too thick nor too thin sell at a premium.
6. Cutlet Size
If you don’t know what a cutlet is, it simply refers to the facet at the bottom of a diamond. Most of the stones available today are not cut using cutlets. For that reason, the optimal situation for diamonds is either having no cutlet at all or just having a small one. Since the presence of big cutlets can be visible from a diamond’s top and impair its pattern of light return, those stones with big cutlets will sell at a discount.
7. Special Cuts
Some diamond sellers will select those diamonds that are best cut and create selections for them. This selection will feature those diamonds that are cut with ideal proportions. You will find such diamonds sold at a premium after being labelled using a special brand.
8. Brand
The brand which the diamond is sold under will also have an effect on its final price. In most cases, you will find that high-end jewelry brands charge a premium. This is chiefly because the brand’s name is already associated with luxury so the extra cost is due to the brand’s name. You can find a stone with exactly the same characteristics elsewhere but at a cheaper price.
Conclusion
From this guide, you can see that there is no magical mathematical formula for calculating the price of diamond. This valuable stone’s pricing is a rather complex matter that involves many variables. If you are looking to buy one, the easiest way you can size up a deal is by comparing the prices quoted to you against the online diamond prices. For example, if a certain diamond with specific quality characteristics goes online at $5,500, you should never pay more than $8,000 for a similar type of diamond sold by a brick-and-mortar vendor. Apart from being able to compare the prices fast and from the convenience of your home, online diamond prices are always the lowest. This is because they have very low overhead costs because they don’t pay retail display space and the storage costs are either very small or non-existent. When you decide to go online, James Allen and Blue Nile are arguably the best online diamond retailers thanks to their more than 150,000 certified conflict-free stones with free shipping and a lifetime warranty. Finally, as you shop around always remember that when it comes to buying diamonds, cheap deals don’t exist, fair ones do.