Determining Diamond Price: A Quick Diamond Grading Primer
Article by Adam Zimmerman
10.18.2022
It’s intriguing how some diamonds sell for a couple hundred dollars, while others get auctioned off for millions at glamorous, high profile events. Without a doubt, the wide world of diamond pricing may seem quite mysterious to many. Since every stone is one of a kind, you might be wondering how on Earth the industry standardizes diamond value. To understand the market, with its broad range of tastes and options, discover these three main concerns.
First, you need to know a bit about the 4Cs of Diamond Quality, developed by the Gemological Institute of America (GIA) as diamond grading guidelines. Then, you’ll learn how to use a popular, ever-evolving diamond price list to empower better deals. Finally, we’ll conclude by discussing how and why a special kind of diamond is being sold at a more consumer-friendly price point.
GIA developed the International Diamond Grading System™ and its associated 4Cs framework so that buyers and sellers would have standards to follow when determining diamond value. A diamond’s GIA report includes a great deal of objective information based on the 4Cs. For instance, by reading your diamond’s GIA report, you will learn if the stone is natural or created in a laboratory. Furthermore, you will know, scientifically, whether anyone has subjected your diamond to chemical treatments, often done to increase its aesthetic. Keep in mind that a natural, untreated diamond’s value is higher than that of a treated or lab-grown diamond with the same basic properties.
GIA's 4Cs of Diamond Quality
GIA’s 4Cs of Diamond Quality are cut, clarity, color, and carat. Let’s take a look at each.
Cut
How well does your diamond interact with light? When evaluating the cut, this is the essential question. Graders observe and test for brightness, as well as other compelling visual effects and patterns. For instance, the term “scintillation” refers to patterns of light and dark. Although a diamond’s cut is sometimes mistakenly referred to as simply its shape, the cut is, in fact, the most complex of the 4Cs.
Clarity
According to the GIA International Diamond Grading System™, a diamond’s clarity ranges on a scale: from flawless (FL) to obvious inclusions (I3). Exceedingly rare, flawless diamonds appear to lack both internal imperfections (referred to as inclusions) and external blemishes. The most common clarity grades are VS, which means “very slightly included,” or SI, which means “slightly included.”
Color
In the International Diamond Grading System™, the lowest letter, highest value grade goes to pure, flawless diamonds, which appear virtually colorless and are quite rare. On the other hand, light yellow or brown diamonds receive the highest letter grade. These also tend to be less valuable. Color grades range from D to Z, with the exception of so-called fancy-color diamonds, which are naturally colored diamonds graded outside this range. Fancy-color diamonds can be extremely valuable.
Carat Weight
A GIA report includes a diamond’s weight, measured in units called carats. GIA diamond grading starts with measurements to a thousandth of a carat (0.001 CT), usually rounded down to the nearest hundredth (0.01 CT). However, graders round up whenever the thousandth digit is a nine.
One large stone is almost always more valuable than many smaller stones weighing the same amount. For example, a 2-carat, single-stone diamond ring fetches a higher price than a ring with 10 small 0.2-carat stones.
Image:
Sample GIA Report
Rapaport: Diamond Value Quantified
Buyers and sellers both use the Rapaport Price List to estimate diamond value. Rapaport’s listed diamond prices are typically on the higher side, compared with actual sales prices. Yet, they are still a handy reference when figuring out how much a particular diamond is worth, as long as you know its properties. Notably, round diamond prices get updated weekly, whereas fancy shape prices are only updated monthly.
Rapaport considers color, clarity, and carat weight as primary factors. When you read the Rapaport data, you’ll notice several charts, separated according to carat weight. Within these, you’ll see both color grades and clarity grades.
To calculate the estimated price of your diamond, you will first need to cross-match the diamond’s clarity and color on the appropriate table for its carat weight. You’ll get a number value when you do this. Multiply that value by 100 and by the carat weight of the diamond (value * 100 * carat weight).
Image:
Rappaport Sheet
Want Lower Diamond Prices? Choose Laboratory-Grown Diamonds
Laboratory-grown diamonds are all the rage these days, and for good reason. Chemically speaking, diamonds grown in a laboratory are made of the same carbon atoms and molecules, arranged in the same crystalline structures as natural diamonds. Physically, the diamonds have the same essential properties valued by the GIA’s 4Cs: color, cut, clarity, and carat. You wouldn’t know the difference just by looking. Instead, we need special instrumentation to differentiate natural diamonds from those grown in the lab.
Why aren’t these factory-produced beauties the same price as natural diamonds? Because natural diamonds formed underground in high-pressure, high-temperature conditions, they are comparatively rare. Each natural diamond represents a bit of Earth’s history that someone can hold in the palm of their hand. Therefore, natural diamonds are generally more valuable than lab-grown diamonds.
At the same time, lab-grown diamonds are both pleasing to the eye and easier on the budget, making them an increasingly popular modern option for jewelry enthusiasts. They can have just as much variation as natural diamonds, and they’re made with jewelry lovers in mind. Diamond-growing techniques are just a few short decades old, and their aim is often to replicate and accelerate the natural conditions in which diamonds form.
Relatively recently, in the 1970s, General Electric researchers developed the first gem-quality laboratory-grown diamonds, meaning that their quality was suitable for jewelry. Today’s large diamond-growing factories frequently use techniques called High Pressure High Temperature (HPHT) and chemical vapor deposition (CVD) to grow increasingly larger diamonds.
Please see our video about what is better Lab Diamonds or Natural Diamonds.
At this point, it’s also worth mentioning the popularity of other synthetic gemstones, like cubic zirconia and moissanite. Although these gemstones are not technically synthetic diamonds, they look a lot like diamonds to the unaided eye.
Bottom line: you may need to consult an expert if you need to determine whether you have a natural diamond, synthetic diamond, or a diamond imitation like cubic zirconia or moissanite. When it comes to diamond value, you really do need all the facts you can get, especially when you have a larger stone.
