How Are Diamond Prices Calculated?

Diamonds are a common gem of choice found in rings, necklaces, and bracelets. Most people know that diamonds can be expensive, but they are unaware of the price factors. There are four main categories used to price diamond jewelry, also known as the four C’s.

Factors used to determine Diamond Price

Color Grade

The color grade of diamonds ranges from D being colorless to Z being light yellow or brown. The less color in the diamond, the more valuable it is. Diamonds are found within the earth, meaning they are often left with a certain level of color. Diamonds found without stains are more difficult to find, making them more valuable. When you go beyond the D-Z scale, you discover the more fancy colors such as blues and purples. These color varieties are exceptionally rare, which means these colors will have the highest pricing.

Clarity Grade

The clarity grade refers to a metric that grades the visual appearance of a diamond. The clarity grade ranges from IF, which stands for “Internally Flawless,” to I, which is “Included.” Internally flawless diamonds are the rarest of clarity levels since this indicates it’s nearly perfect. These diamonds will be the most expensive. The least expensive diamond are the ones in the Included category because they have more blemishes or flaws.

Cut 

Next, we have the cut of the diamond. The cut is how the diamond gets carved before being placed into jewelry. There are all kinds of shapes, from round to square and even heart-shaped. The top three most expensive diamond shapes include the round cut, princess cut, and cushion cut. Round cuts are the most costly due to the high demand and the amount of raw material needed. Princess cut diamonds are more affordable for those who cannot afford the round cut. They are less expensive because less of the material is cut away in the shaping process. Cushion-cut diamonds are a mix of square and rounded shapes. These are about 25% cheaper than the round cut diamonds.

Carat

The final category is the carat. A carat is a unit of measurement used to weigh a diamond. The more carats a diamond has, the more expensive it will be. The process, however, is a bit more complicated than that. For example, a two-carat diamond can cost anywhere between $5,000 and $60,000. It depends on all of the factors, including carat, cut, clarity, and color. Since diamond pricing is so complex, you cannot use carat alone to determine the value.

Why is the price of Diamond Jewelry so complex?

Diamonds are rare gems found within the earth, and no two are identical. Due to the rarity and uniqueness of each gem, a complex process is required to evaluate, shape, and price each individual diamond. The process is a necessity to ensure that the gems are not given out for too low of a price. If a diamond has a perfect cut, but the color isn’t great, you wouldn’t want to sell that for top price. All of these factors are in place for both the seller’s and buyer’s benefit.