You have come to the right place to learn about diamond pricing! Unlike traditional retail stores selling products at set prices, diamonds have 4 different categories that affect the overall price. These are the cut, color, clarity, and carat weight; all commonly known as the 4Cs.
All 4 of these factors can contribute to substantial price variations in diamond pricing. The current market value, and supply of mined diamonds also play major roles when it comes to determining current diamond pricing.
The 4Cs of Diamonds
Diamond Cut impact on Diamond Pricing
Diamond cut is seen as the most important factor of the 4Cs. This is because the specific cut of each diamond is what determines how that diamond will reflect light, and more commonly explained, how it will sparkle. Diamond cut can actually affect diamond pricing by over 30 percent.
Round diamonds in particular usually command the highest prices and are thought to hold the most value when compared to another diamond shape of similar color, clarity, and carat weight.
Diamond Color impact on Diamond Pricing
Another factor that impacts diamond pricing is the color. Diamonds are graded on a universal color scale from D to Z. The clearest and rarest diamonds start at the D grade and go down in color variations to the Z grade. The Z colored diamonds will be yellowish in color and be very undesirable.
The average color grade for people looking for a quality diamond at a reasonable price will be found in the K to L range using the color scale.
Diamond Clarity impact on Diamond Pricing
Diamond clarity focuses on ‘inclusions’ or internal defects in the diamond. From Flawless (FL) all the way down to I (Included). Flawless diamonds will command the highest prices while Included diamonds will command the lowest prices. You should focus on finding a diamond in the VS2 or better (VS1, VVS2, VVS1, IF, FL) ranges.
Diamond Carat Weight impact on Diamond Pricing
The “size” of a diamond is determined by its carat weight and for all reasonable and practical reasons, it’s also one of the biggest factors in determining the price of a diamond. Instead of buying a 1-carat diamond, ask to see one that is .99 carats.
The size difference is hardly noticeable with the naked eye and the savings could be in the hundreds or even thousands depending on other factors. If he or she wants to stand out amount their peers though, they are going to want a BIG diamond!
Raw/Rough Diamonds impact on Diamond Pricing
Raw diamonds are less expensive to purchase due to the manufacturing process required to raise the value of the diamond. Master stone-cutters will take a raw diamond and cut it into workable pieces that they can select to get the best possible cut. This process is labor intensive and adds significant value to the end result.
Check with your local diamond jeweler about purchasing raw diamonds as an investment. Be sure to find out if they’re conflict-free and not blood diamonds. A quality jeweler will be able to provide documentation about its origins. You could also consider a ‘raw diamond engagement ring’ such as the one below!
Import and Export Brokers & Wholesalers
Some other various ways diamonds are priced can factor with the rough polished diamond. A polished rough diamond is priced for sale and then sorted to import and export brokers and wholesalers. India is the robust trading center for polished diamonds by weight, however, manufacturers in India have difficulties in obtaining larger polished diamonds to supply top-level buyers like DeBeers.
The reason is simple, DeBeers puts restrictions on the amount of larger rough diamonds they will buy from India to ensure that other cutting facilities won’t be undercut by India’s cheap labor cost advantage.
The larger rough diamonds are manufactured in Antwerp, Israel, and New York. Although South Africa and Russia get their share of the spoils, the majority of large rough diamonds and the most vital centers are still Antwerp, Israel, and New York.
The best polished rough diamonds are found in these centers and it’s where brokers and wholesalers can be a factor for the price of a diamond due to the large number of investments involved.
Supply and Demand During Seasonal Holidays/Occasions
Gold plays a factor in economic fluctuations, high prices with seasonal trends, and the non-availability of diamonds during this time can be a factor for the price of diamonds. Jewelry manufacturers of diamonds work hard to obtain a profit margin while having product available to meet the consumer demand.
Seasonal trends like Valentine’s Day and Christmas will always see a slight rise in cost and manufacturers work double-time to ensure an adequate supply of diamonds is ready for these seasonal occasions.
Final Factors on Diamond Pricing
As you can see, there are a lot of various factors that can and do affect the price for any type of diamond. Having a clear understanding on how the diamond world operates will not only make you a wiser investor but an educated individual and lessen the odds of getting ripped off. It will also help you when it’s time to start thinking about an engagement ring or other diamond ring purchase!