Why are diamonds so costly? And who determines their price? Why are the pricing of two diamonds with the identical Four Cs ratings different? Prices for diamonds frequently seem enigmatic. Discover the factors that affect diamond costs to help you choose the ideal engagement ring.

Diamond Pricing

In contrast to other stones, diamonds have a fixed international market price. Diamond is similar to gold in this regard. Pricing for diamonds is, however, a lot more difficult than for gold. Unlike diamonds, which must be evaluated in order to establish their worth, every ounce of gold is the same. Despite the fact that the 4 Cs are the fundamental grading standard, a wide range of additional elements affect diamond value.

From the mine to the wholesaler to the retailer, diamonds used to pass via a number of intermediaries (up to eight). Prior to the diamonds being sold at retail, each of them took a cut. The diamonds were then offered for sale by the shops at any price they chose.

Martin Rapaport Value system

A fundamental understanding of the value of diamonds was required before they could have a steady and predictable market price. A “rap list” of colorless round, pear, and marquise-cut diamond prices was developed by Martin Rapaport in 1976. These standards, which are based on the high cash asking price in New York, are published monthly in Rapaport magazine and updated every week online at RapNet. Only individuals who are directly involved in the industry have access to these rules. These reports are used by retailers all over the world. The least expensive membership for the price guide starts at about $55 a month, with prices generally running into the thousands.

This graph is similar to what you could find on a standard Rapaport diamond price list. The report’s publication date, the price range for the diamonds’ shapes, and the carat size range are all stated in the header at the top. Select a color grade (leftmost column) and a clarity grade (top row) to begin calculating the cost of a diamond. Then, multiply the result of their intersection by 100, and finally, by the carat weight. An I-color, VVS2-clarity diamond, for instance, would cost $3,000 per carat. Consequently, a 0.46-ct round diamond with these characteristics ought to cost about $1,380. Take note of how a diamond’s price drops exponentially when its hue and clarity decline.

How Rapport Prices Affect Prices

Rapaport’s founding was helpful for consumers, but it was terrible for diamond dealers because it made it harder to manipulate diamond pricing. Additionally, it commoditized something that had been presented for years as special and of incalculable, everlasting value. Retailers continued to sell diamonds for more than Rap prices for decades after the Rapaport price guides were established. Retailers typically sell diamonds for around the Rap price these days due to changes in the industry and consumers’ increased capacity to compare prices.

Between ten and fifteen percent under Rap is frequently seen as a fantastic retail offer. A great deal for wholesale is between 30 and 35 percent below wholesale. However, reductions on less well-liked diamond colors and shapes could be bigger. Of course, there are exceptions, including huge, exceptionally rare, or historic diamonds. These aren’t taken into account in Rapaport price guides.

The Rap Prices’ Restrictions

Rapaport also does not consider all potential value-related elements. For instance, based on Gemological Institute of America (GIA) standards, the Rapaport price guide emphasizes Color, Clarity, and Carat but does not account for Cut. It is assumed that each diamond on the list is of a fine cut. Of again, given that consumers should ideally only buy stones with “Excellent” cut grades, this isn’t a major error. Lower cut grades just don’t sell well and don’t have a nice aesthetic appeal. A stone should also be “Excellent” or “Very good” in polish and symmetry, which are also not included in Rapaport.

The 4 Cs and Beyond: Diamond Price and Quality

Simply searching for good discounts online or in stores is the greatest strategy for consumers. The four criteria used to grade diamonds are color, clarity, cut, and carat. Consumers frequently are unaware that these ratings contain minor subdivisions, variances, and judgment calls that are not included in the grading report.

Borderline Diamond and Stone Prices

More than one grader evaluates each diamond that is GIA certified. A diamond may occasionally be in the exact middle of two grades. A senior grader will be asked to decide if two graders are in disagreement. The grade difference results in a significant price difference, therefore it’s a big decision. Even if that stone is placed in the better category, it could not be the best purchase financially. The stone might be a great deal, though, if it belongs to the lowest category. Naturally, after the stone leaves the lab, no one is aware of the exact grading procedure each stone underwent. A skilled gemologist is needed to determine whether a stone is a decent deal for the price range.

Simply told, there are a lot of things to take into account when using the well-known 4 Cs grading criteria. Therefore, a VS2 grade does not ensure an eye-clean stone or that it will appear more appealing than a “high” SI1. Consumers are best aided in making this decision by actually seeing the stone. Since many diamond websites now offer 3-D renderings of the stone or enable customers speak online with gemologists to inquire about the stone’s properties, they have taken notice of this.

Diamond Cut

Because they advertise greater cutting precision and a larger loss of rough, some branded cuts, like “Hearts and Arrows,” will cost extra. Diamonds with the “Hearts and Arrows” pattern will be more symmetrical than most other diamonds. They may not necessarily have higher overall cut grades, though.

Diamond Colour

Diamonds come in a variety of shapes, and their prices change according to how popular they are. The most expensive items are rounds because they are in high demand. When cut, they produce the greatest loss of diamond rough. Faceters assess the value of a given cut at that particular time against the quantity of discarded rough the cut demands when deciding what shape to cut a diamond into. The best value for the diamond is typically obtained with a cut that reduces stone mass. The majority of diamonds, nevertheless, that can be commercially cut into rounds will be done so.

Diamond Shape

Diamonds come in a variety of shapes, and their prices change according to how popular they are. The most expensive items are rounds because they are in high demand. When cut, they produce the greatest loss of diamond rough. Faceters assess the value of a given cut at that particular time against the quantity of discarded rough the cut demands when deciding what shape to cut a diamond into. The best value for the diamond is typically obtained with a cut that reduces stone mass. The majority of diamonds, nevertheless, that can be commercially cut into rounds will be done so. Currently, cushions are quite fashionable. As a result, customers can anticipate paying a little bit more for cushions than for other elegant forms.

Diamond Hue

On the standard color scale, colorless diamonds typically have a yellowish, brownish, or grayish hue. The hue of the diamond first becomes visible at a color grade of G, however it is only noted on grading reports if the color grade is below K. While yellowish diamonds tend to be more expensive, brownish and grey diamonds are more frequently used in edgy modern and occasionally even vintage jewellery.

Fluorescence

Depending on the color of the fluorescence, fluorescence will reduce the value of diamonds with the D-F color grade and may boost the value of diamonds with the G-J color grade. A stone’s worth can be reduced by medium to intense fluorescence, which gives it a milky appearance. However, any yellowish tint that a diamond of poorer quality may have can be neutralized with blue fluorescence. Therefore, it might actually make diamonds with grades G or lower have better color. Only blue fluorescence exhibits this marginal value increase.

On the other hand, unless the diamonds are fancy yellow or green, yellow or green fluorescence will always result in lower diamond pricing. In these scenarios, the fluorescent hues will give the diamonds’ colors the appearance of being more saturated, raising their value.

The value of a diamond is not much impacted by weak fluorescence. Even though it has no effect on the way these stones look, it may marginally reduce their price. The diamond that is just a little fluorescent in this situation can be a fantastic buy.

There are good, fair prices on diamonds even though there are no very amazing ones. Websites are able to sell diamonds for less than a physical store since operating an online business has lesser overhead.