What Factors Determine Diamond Prices?

Executive Summary About Diamond Prices Per Carat By Ian J. Maher

3 carat diamond prices

If you have been shopping for diamond jewelry, you have probably noticed that jewelry such as engagement rings, eternity rings, diamond necklaces and earrings are on the market for a wide range of prices. As with many consumer products, diamond prices paid by end users are affected by the value that is added at each level of the supply chain. Diamonds are mined from the earth in what can be expensive, elaborate mining operations, incurring an initial cost. Then diamonds are placed on the market for purchase by wholesalers or diamond dealers, who in turn sell them to various retailers. Finally, diamonds are in retail stores and ready for purchase by consumers. The cost to mine, prepare and market a diamond is not the only determinant of the end price of a piece of diamond jewelry. Diamonds are appraised and valued individually based on evaluation of the four Cs-carat, cut, clarity and color.

The price of a diamond is calculated based on some determined value per carat. That is to say that the value of a 0.5 carat diamond which is valued at $3,000 per carat would be calculated as $3,000×0.5 = $1,500. However, despite the apparent simplicity of the (price per carat x carat weight = diamond price) equation, several factors influence the determined per carat value of an individual diamond. Evaluation of a diamond’s color, clarity, and cut contribute to the determination of its per carat value, with diamonds exhibiting the most attractive combination of features being considered the most valuable and thus the most costly., the carat weight for an individual diamond is also affected by its rarity. Since a one carat diamond is much rarer than a half-carat diamond, a one carat diamond will incur a higher per carat weight than an otherwise equivalent half-carat diamond. Each diamond must be individually appraised in order for a value determination to be made.

Price of Diamonds

Executive Summary About Diamond Prices Per Carat By Kirsten Katz

What Influences The Price of Diamonds?

Diamonds are cut in a range of shapes, sizes and qualities all of which influence the price. Diamonds that have an excellent or very good cut grade will reflect maximum fire, brilliance and sparkle and they will be higher in price than diamonds with a good cut grade.

The Shape of Diamonds

Round Brilliant Cut Diamonds are the most popular shape of diamond for engagement rings followed by the Princess Cut. Any diamond that is not Round in shape is known as a Fancy Shape Diamond. Asscher, Cushion, Emerald, Heart, Marquise, Oval, Pear, Princess, Radiant and Trilliant cut diamonds are all fancy shape diamonds. Round Brilliant Cut Diamonds are the most expensive mainly because when cutting a Round Brilliant Cut diamond there is a greater loss in rough which has to be factored into the price. Another reason why Round Brilliant Cut diamonds are priced higher is because they take longer to polish and cut than other diamond shapes and the demand for Round Brilliant Cut diamonds is greater than all the other diamond shapes.

Clarity Influences Diamond Prices The Most

The clarity grade of a diamond influences the price obtained more than any of the other factors. Diamonds that have high clarity grades of VVS1 or VVS2 have extremely hard to find inclusions even with a jewellers 10x loupe. The rarest of diamonds have an Internally Flawless -IF or Loupe Clean clarity grade and these diamonds fetch premium prices.

Colour Influences Diamond Prices

Colour is another important factor that influences the price of a diamond. Diamonds are graded for their colour alphabetically starting at D colour going down to Z colour. Diamonds that are colourless or show the least amount of colour obtain the highest prices along with fancy coloured diamonds such as pink, red, green and blue diamonds. Diamonds that display the least amount of colour are known as exceptional white. Exceptional white diamonds includes D and E colour graded diamonds. Rare white is the next colour grade and this includes F and G colour diamonds. H colour diamonds are graded as white and I and J colour diamonds are known as slightly tinted white diamonds.

Cut Influences Sparkle, Shine & The Price of Diamonds

The cut of a diamond is what makes a rough diamond sparkle and shine. If a diamond is poorly cut, the light that enters the diamond from above will leak out of the sides and bottom of the stone, and the diamond will not have the optimum amount of sparkle or fire-regardless of its color or clarity. Excellent and Ideal Cut Diamonds have been cut to precise standards to display the beauty of the diamond.

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