The 4 C's
What Is My Diamond Worth?
Diamonds are evaluated based on the 4 C’s: Color, Cut, Clarity, and Carat Weight. Without this evaluation system, no one would be able to differentiate between different stones! The evaluation system is crucial to understand the difference between one diamond and the next, much like how wines need to somehow be differentiated between one and the next. All diamonds are graded by their 4 C’s, but how those factors influence their worth differs depending on whether it is a colorless diamond or a fancy color diamond.
In colorless diamonds, a diamond is worth more when it exhibits the least color. Since colorless diamonds are graded on a scale from D-Z, D being the most colorless and Z being quite yellow, a diamond is worth more the closer it falls to D on the scale. In addition to this, a diamond’s value increases the better its Cut, the better its Clarity, and the higher its Carat Weight. For example, a 100 carat D color Flawless diamond with excellent cut, excellent symmetry and excellent polish is worth quite a lot of money, while a 0.10 carat K color SI2 diamond will be worth significantly less. In the case of all colorless diamonds, their value is determined by a special price list by the Rapaport Group. Once the evaluator of your diamond is aware of its characteristics, they look up the characteristics in the official RapList and tell you what it is worth, much like when the price of a car is being evaluated. This needs to be done by someone who has access to the list because it is not distributed to just anyone, although many diamond dealers can give you a rough estimate just by looking at it. Take a look at the following charts to see the highest and lowest levels of the 4 C’s, and it you already know the 4 C’s of your own diamond, you can get a good idea of what your diamond is worth. Since Carat weight is a metric scale, no chart was necessary for an example. Carat weight starts at 0.01 and can be as large as 1,500 carats (no diamond larger than that has yet been discovered).
The diamond color grading scale according to the Gemological Institute of America. | Image credit: GIA
The diamond clarity grading scale according to the Gemological Institute of America. | Image credit: GIA
The diamond cut grading scale according to the Gemological Institute of America, used for Cut, Symmetry, and Polish. | Image credit: GIA
In fancy color diamonds, the system is similar but different. They are also graded according to the 4 C’s, but the 4 C’s have different bearing on the diamond’s value. In colorless diamonds, the 4 C’s more or less have equal bearing. In fancy color diamonds, the Color grade is by far the most crucial, and the other 3 C’s have more or less equal influence. The Color in fancy color diamonds is graded according to the saturation of the color, on a scale from Light to Vivid, and the more saturated the color, the more the diamond will be worth. For example, a 50 carat Fancy Vivid Blue VVS1 diamond will be worth far more than a 40 carat Fancy Light Blue VVS1 diamond merely because of the difference in the color. In addition, note that as a general rule of thumb, fancy color diamonds are worth significantly more than colorless diamonds (unless it is a colorless diamond of extraordinary characteristics versus a very low standard fancy color diamond of a less important color). Certain colors of fancy color diamond are worth more than other colors, regardless of the color grade. For example, a 2.00 carat Fancy Light Blue diamond is worth significantly more than a 10 carat Fancy Dark Brown diamond. There are 12 colors of fancy color diamonds: red, orange, yellow, green, blue, purple, violet, black, white, brown, gray, and pink. It would take a diamond professional, such as the laboratory of the GIA, to tell you the exact color your diamond. Then, a diamond expert will be able to tell you how much your diamond is worth. See the following chart to get an idea of how high the color grade is for your diamond.
The diamond color intensity scale, shown with red, blue and green diamonds. | Image credit: Leibish & Co.
What is Worth More, Gold or Diamond?
In order to answer this question, I went back in time at price records for both of these commodities. I wanted to compare them properly, which meant that I needed to see how much 1 gram of each of these were worth on a given day that both were sold, and then check these prices again at another date. I collected this data starting with 2003 and ending in 2015, and did a detailed analysis and explanation. I even included other commodities such as platinum and valuable works of art as comparison points. You would be interested to see that while gold ranged from a value of $13 – $52 per gram, fancy color diamonds were worth $2 million – $10.8 million per gram! It is very plain to see diamonds are worth more than gold, especially fancy color diamonds.
What Are Diamonds Worth?
Diamonds can go for millions and millions of dollars – but also for hundreds or thousands. The hundreds or thousands of dollars valued diamonds are the ones that are bought regularly via retail stores or from jewelry specialists. Million dollar diamonds are the ones that are bought at auction or via special interest diamond deals with specialist dealers. That is not to say that only big ticket diamonds gain value over time. In fact, the behavior of diamonds at auctions is what causes a domino effect for diamond pricing across the board. For example, when a Fancy Vivid Blue diamond makes a new record price at auction, the prices of all blue diamonds rise. This is excellent news for someone who owns a diamond in that color, because each time the prices rise, it means that they can resell the diamond at a price higher than they paid for it, making a profit in turn. Diamonds are worth what the market is willing to pay for them, and because fancy color diamonds are rare and valuable, they sell for high prices indeed.
The Blue Moon diamond, a 12.03-carat Fancy Vivid Blue diamond that sold for $48.5 million in November – the most expensive diamond ever sold at auction, whose sale caused a blanket price rise in blue diamonds. | Image credit: Sotheby’s
If you are looking to buy a diamond that will eventually be worth more, pay careful attention to the 4 C’s because not all diamonds will gain value. Focus on fancy color diamonds and get the guidance of a diamond investment professional to make sure that you are buying a color that is likely to rise in value, and has other good quality characteristics to its benefit. Then when you are ready to sell – you will undoubtedly gain.