How Diamonds are Valued?

How Diamonds are Valued

Diamonds come in a myriad of shapes, sizes, and colors, and with varied compositions. Diamonds go through refining processes including polishing before they are “consumer-ready”. At this point, diamonds will be given certain values or grades based on several factors.

So how are diamonds valued? Diamonds are valued based on their rarity and composition. Jewelry professionals came up with the grading system in the 1950s to evaluate each individual diamond. The grading system is based on four descriptive factors, referred to as the 4Cs, to classify diamonds including Clarity, Carat Weight, Color, and Cut.

Diamonds will often be graded based on the 4Cs and rarity of any of the factors they possess. Continue reading to see how each “C” affects the value.


Diamond miners always hope to find that perfect diamond that is crystal clear and the right size and shape. Well, this is nearly impossible because just like everything else in life perfect doesn’t quite exist.

Most diamonds have chemical impurities, inclusions, or surface irregularities/blemishes. These are referred to as clarity characteristics and clarity refers to the marked absence of impurities and inclusions in a diamond.

What is an Inclusion?

An inclusion refers to the internal structure of a diamond whereby a foreign compound is included in the diamond’s structure as it forms. For instance, black diamonds appear so because of the inclusion of graphite in the diamond’s structure.

What are Blemishes?

Blemishes can be anything like nicks or scratches observed on the surface of a diamond.

Clarity characteristics do have an influence on the value of a diamond. The more “clear” or “flawless” a diamond is the more valuable it is.

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Most diamonds have tints of brown or yellow and any diamond that is colorless will be considered much more valuable than those with yellow/brown tints.

For instance, there can be two identical diamonds in terms of size, cut and clarity but their value will defer based on their color alone. The slightest hint of color difference makes a world of difference when it comes to valuing diamonds.

Natural diamonds are available in a myriad of hues ranging from colorless diamonds to light brown/yellow diamonds. Colorless diamonds are most rare and most valuable.

The GIA Laboratory came up with a D to Z color grading system with each letter representing color ranges based on a diamond’s saturation and tone. When exposed to ultraviolet radiation most diamonds will emit fluorescence lights. 35% of gem diamonds are said to emit fluorescence.


Polished diamonds that have been fully refined often give off a dazzling glare. When light hits a diamond the amount of light it reflects gives it its dazzling appearance. A diamond’s cut affect how light interacts with it and in turn affects its face appearance.

A stunning diamond looks the way it does because of 3 optical effects including brightness (light reflections), fire (color flashes), and scintillation (dark and light areas). The size has a direct correlation with the pattern of the diamond. The contrast of dark and light areas within the diamond affects the pattern of the diamond. Good contrast results in a crisp and sharp look.

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Carat Weight

Diamonds are measured in carats “ct”. Generally, large diamonds are hard to come by and more so large colorless diamonds. A large diamond not only costs more due to its rarity but also it is also valued more based on a per-carat basis.

For instance, four 0.25 carat diamonds that are similar in every sense compared to a large 1-carat diamond might still cost less combined compared to the 1-carat diamond all quality factors considered.

Now that you understand how diamonds are valued you should be able to understand why one diamond costs more or less money than another.

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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