What Determines a Diamonds Value?

The word diamond comes from the Greek word adamas meaning unconquerable or invincible which is quite fitting since diamonds are the hardest naturally occurring substance on earth. Formed under intense heat and pressure from hundreds of miles below the earth’s surface it has been estimated that it takes 250 tons of ore to produce a single, one carat gem quality stone. Now consider that the vast majority of mined diamonds are not destined to be used in jewelry but utilized for industrial uses such as cutting tools and abrasives and one can begin to appreciate the rarity of fine diamonds.

In order to establish a particular diamond's quality and desirability, jewelers must carefully examine each one of the 4Cs
Cut
Color
Clarity
Carat Weight

The interaction between the “4Cs” will determine a diamonds value. Mother Nature controls three of the most important C’s - diamond clarity, diamond color and diamond carat weight. Diamond grading standards often reflect very subtle graduations of differences in a stone such as a slight shift in color, small carbon spot, or imperfections in the cutting or polishing of the diamond can have a significant affect its value. Diamonds that rank very well in all “C” categories are the rarest and understandably the most valuable.

Understanding the 4 C’s

CUT
Mother Nature controls three of the 4 C’s - diamond clarity, diamond color and diamond carat weight but it takes the skilled hands of a master craftsman to unlock the fire, brilliance, and sparkle hidden in natures creation. Depending on the nature and shape of the uncut rough stone, the diamonds may be cut into a number of shapes including round, heart, marquise oval, pear, emerald, and princess.

The diamond cutters skill dramatically influences the fire and sparkle of a diamond. People will often confuse diamond shape with cut. The shape is largely a matter of personal preference and is limited only by the imagination and skill of the diamond cuter. The cut dictates how well a diamond makes use of available light. When cut to proper proportions, available light entering the diamond is refracted from one facet to another and then dispersed through the top or bottom of the diamond creating a beautiful light scintillation and sparkle display.



Diamonds that are cut to deep or shallow allow light to escape the stone before it can be refracted reducing its brilliance. Well proportioned and cut diamonds naturally command a higher price.


COLOR
Nature creates diamonds in an almost a complete rainbow of colors including green, red, yellow, blue, pink, amber, etc. (Red is considered to be the rarest among colored diamonds.) In fact, perfectly colorless diamonds are extremely rare and highly valued since they allow light to pass effortlessly through the stone and be dispersed as rainbows of color.

The Gemological Institute of America (GIA) Diamond Grading System utilizes letters to represent the various diamond colors, beginning with D (colorless) and ending at Z (light yellow or brown). While at first glance a diamond may appear to be colorless upon close inspection of the gem diamond often reveals tinges of yellow, and brown (color grades P and Q) creating an almost champagne coloring. Although champagne diamonds are still quite beautiful, they are less rare and therefore less valuable. The “best color” for a diamond is no color but to appreciate the beauty of each individual stone, you should compare diamonds side by side with your jeweler.


CLARITY
Almost all diamonds contain tiny, natural birthmarks known as "inclusions". These are minute traces of non-crystallized carbon or small non-diamond crystals contained inside the cut diamond. Most inclusions are not discernible to the naked eye but require the magnification of a jeweler’s loupe before they become visible. The fewer and smaller the inclusions, the less likely they will interfere with the passage of light through the stone.

The number, color, type, size and position of surface and internal birthmarks affect a diamond's value. Truly flawless diamonds are extremely rare and likewise command premium prices. The GIA Diamond Grading System for clarity grades from flawless (F), to diamonds with more prominent inclusions (I3). Diamonds with very, very small inclusions are graded as VVS1 or VVS2. Larger inclusions that can be seen with the naked eye are graded I1 or I3.


CARAT
The final C is diamond carat weight. As with all precious stones, the weight of a diamond is expressed in carats. Carats originated as a unit of weight measure based on the carob tree seeds. Today diamonds are weighed using a standardized system of metric carats. One carat weight is divided into 100 points so that a diamond of 75 points is described as a three quarters of a carat or 0.75 carats.

While carat weight (size) may appear to be the most obvious factor in determining a diamonds value, the overall quality including cut, color and clarity have a major influence on value.