How Are Diamond Costs Calculated?

You know the classic statement that diamonds are a girl’s best friend, well until you see the price, then it could be a whole different story. In reality, diamonds can vary entirely in prices; one could be quite a reasonable price, and the other rather extortionate. So, how are diamond costs calculated?

The cost of a diamond is calculated per carat, but it can also depend on the weight of the carat as well as many other essential factors such as the four c’s that come into play, you have the cut, color, clarity, and carat weight. Most diamond retailers will follow: Carat Weight x Diamond Price Per Carat to price their diamonds.

From the human eye, it is near impossible to tell the difference between a cheaper type of diamond in comparison to one that is worth a lot more money. Professionals can tell the difference, letting retailers know what it is worth. You might find that most will overcharge and that’s why it is a good thing to know the value and worth of a diamond, even if it is only the basics.

How you calculate the price of a diamond per carat

Diamonds are all priced per carat, so if you had a 0.50 carat diamond and it cost $1500 per carat, that would mean 0.50 costs $750. The diamond’s price per stone would calculate as $1500 x 0.50, or $750. As the weight of the carat increases, this means the price of the diamond will also cost more.

What you need to know when buying a diamond.

Unfortunately, unless you’re a professional, you have no clue whether the price you are being told is correct for the diamond that you are paying. That’s why there are three tips to ensure you know what you’re paying for and to prevent you from overpaying for your diamond.

Here are three things you need to look out for:

1. Certification

If you are spending a lot of money on a diamond, you will want reassurance of its value. It’s a lot of money to drop on something, and if you don’t have certification, then it might be a waste of money, especially if you eventually decide to sell it.

The only places that provide certification in the USA are the GIA and AGS laboratories (EGL if you purchase a diamond in Europe). If you don’t have a diamond certification from any of these, then I would recommend steering clear.

2. Quality

This is where the four c’s come into play again; obviously, the higher the quality of the diamond is the more money you should expect to pay. See also: Why diamonds cost so much

3. Pricing

If you want to pay less for your diamond, then it is a fact that purchasing online will be significantly cheaper than buying in-store, stores will have more overheads. Therefore, part of the cost of a diamond will be covering that and their service. We recommend that you should always shop around and figure out what is right for you and then find it online as the likelihood is, is that you’ll find a cheaper deal.

How the shape of a diamond affect the price

Diamond shapes are very much used for the physical look of the diamond, for example, if you bought a wedding ring, you might want a pear or oval-shaped diamond. The shape will determine the price.

Round Brilliant Cut

According to What is the Most Expensive Diamond Cut,  the most expensive diamond cut is the round brilliant. It is also the most popular cut for engagement rings.

The reason for it being more expensive than other shapes is because it requires more precision when cutting the shape, more rough diamond has to be cut off, meaning that it is usually much smaller but costs much more.

Pear, Oval, and Marquise Cuts

These types of shapes can be significantly cheaper than the round brilliant diamond even if they are the same carat size. This reason being is because less rough diamond is discarded in the cutting process; it doesn’t need so much precision.

Emerald and Asscher Cuts

These cuts are usually considered the cheapest diamond cuts. They are more straightforward in design and require less precision as not as much rough diamond is cut off. Perfect if you are looking for an inexpensive diamond with a higher carat.

Now you know how diamond costs are calculated!

We all know that diamonds are incredibly expensive. Still, sometimes it is nice to treat yourself or a loved one, especially if it’s a special occasion such as an engagement, an anniversary, or a special birthday.

There a few factors when it comes to the cost of purchasing a diamond, the carat, the weight of the carat, the four c’s (color, clarity, cut, and carat), and whether it’s bought online or in-store. You can purchase a good quality diamond for less, but don’t be fooled. We advise you to look into the price of the diamond before you spend your money, make sure you know what you are paying for. You want certification and good quality. Always do your research before investing.

Carl A. Jones, GIA GG

Carl A. Jones is a GIA Graduate Gemologist with over 20 years of experience in the diamond industry. He is an independent jewelry appraiser. He specializes in determining the value of diamonds and advising consumers on how to buy quality diamond jewelry.

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