A one-carat internally flawless diamond in one of the three highest color grades is priced in the range of $10,000 to $14,000 USD, in today’s retail market. The same size diamond in a medium clarity and color grade can be purchased for around $3,500 to $5,000 USD. If you are in the market for a diamond you should familiarize yourself with the properties of a diamond that determine its value, and other factors that affect price. This process should be done if you are in the market for a Rolex watch bejeweled with diamonds.
The physical properties of a diamond are objectively measured in the grading process. The final wholesale value is set by the diamond merchant and is based on the grading report, overall appearance and brilliance, and the cost of the rough diamond, which varies by country of origin. Diamonds from ‘non-conflict’ countries, such as Canada can have a cost premium of 10 to 15 percent.
The grade of a diamond is set by careful examination and measurement of 14 or more properties by a trained gemologist. Diamond grading starts by weighing the finished cut stone on a precision scale. A carat weighs 0.20 grams, and the stone is weighed to the nearest 1/100th of a carat or 1/500th of a gram. The value of a diamond increases almost geometrically with weight-doubling the size can quadruple the price.
The next grading step is to determine the color, ranging from ‘D’ (totally colorless) to ‘Z’ (light yellow). This determination is made by comparing the diamond being graded to a set of reference diamonds called a ‘masterstone’ set. Master stones have the least amount of color allowed for a particular grade. A masterstone set typically starts with an ‘E’ color stone and includes every second color grade down to the lowest color expected to be graded. The subject diamond is placed face-down on a white surface next to one of the master stones and determined by the grader to have more color, the same color, or less color. An alternative color grading method, established by the American Gem Society, uses an electronic colorimeter instrument to measure the color of diamonds. The value of diamonds typically increases by 8 to 12 percent for each higher color grade.
Diamonds are also evaluated under ultra-violet light to determine fluorescence, which can affect their color under various lighting conditions. Stones with yellow fluorescence can look yellowish under artificial lighting, while blue-fluorescing diamonds can appear whiter in lower color grades or milky in higher color grades. Fluorescence is graded in five steps from ‘None’ to ‘Very Strong’. Very strong blue fluorescence can decrease the value of a ‘D’ to ‘H’ color diamond by 8 to 12 percent, and increase the value of an ‘I’ to ‘N’ color stone by as much as 4 percent.
The next grading process determines the clarity of the diamond. Clarity grading is performed under 10 X magnification with side illumination, and the diamond is examined from all angles for both internal and external flaws (blemishes). Some internal flaws can be treated by heating, lasers or by the application of fillers. The grading certificate is required to indicate whether there is evidence that the diamond has been treated. There are eleven clarity grades ranging from FL (flawless) to I3 (heavily included). Diamond values typically increase by 8 to 10 percent for each higher grade in clarity.
The final part of the grading process involves evaluating the cut of the diamond, which involves making nine key measurements and rating the polish and symmetry. Key aspects of the cut quality include depth ratio (diameter-to-depth), table ratio (top center facet width-to-diameter), girdle thickness and culet size (bottom tip). Cut quality is typically graded in five categories-‘Poor’, ‘Fair’, ‘Good’, ‘Very Good’ and ‘Excellent’. The term ‘Ideal’ cut may be used instead of, or in addition to ‘Excellent’, and some diamond sellers have proprietary terms for the very highest quality of cut, such as ‘Signature Ideal’. Cut quality is complex and can have a wide range of influence on value of a diamond. It is common for higher color and clarity grade diamonds to have a better quality of cut.
The final price of a diamond is determined by the diamond merchant based on the objective grading factors determined by the gemologist, the subjective appraisal of the diamond’s overall appearance and brilliance, the cost of the rough stone and the cutting fees. The overall appearance and brilliance of an exceptional diamond can increase its value by 10 to 20 percent, which results in varying prices for diamonds with nearly identical grading reports and origins.