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The price of diamonds is ultimately determined based on the 4 C’s “color, clarity, cut, and carat weight”. Most people today have heard of the famous 4 C’s made popular by DeBeers for consumers and the trade to judge quality, and hence, value when buying or selling. They are Color, Clarity, Cut, and Carat weight. The system was developed in the early 1950s by the Gemological Institute of America. It became a worldwide standard for grading and valuing diamonds. Some independent laboratories created their own grading systems such as the American Gem Society, which is a sister organization to the GIA founded by the same person. Although the AGS scale differs from the GIA scale, the terms can be related back to the GIA scale, reasonably close.
Color is graded on a scale that starts at D as the highest color grade. Many have asked over the years why the scale did not start at a higher color grade such as A, B, or C. The thought process behind this was to avoid confusion with other random grading systems that companies back then might have used to grade gems. D was an arbitrary grade with which to start the system. D, E, and F are all considered colorless grades. They are the highest of white and only slight differences may appear with difficulty separating the grades under normal viewing. G, H, I, and J are all considered near colorless. These grades will normally still face up white to the untrained eye. K, L, and M, are considered faint yellow, though the tint may be also be brown. N through R are considered very light yellow (or brown). S through Z are light yellow (or light brown).
Some lower color yellow diamonds may be referred to as “cape” or “canary.” Some brown diamonds may be referred to as “champagne” color. However, these fancy names for the lower colors of brown and yellow diamonds are marketing terms and are not used by major labs. As the diamond gets lower in color grade, it becomes less rare and hence less valuable. However, if the diamond has color below Z it is considered fancy color and then the prices will start to go back up. While a diamond may be many fancy colors, yellow is the most common. When the color becomes intense or vivid, the price of some yellow diamonds may be higher than the price of a D color diamond. Usually, the other colors of diamonds are rare and can be very expensive. Mostly, these colors are sought after by collectors. Red is the rarest of all colors and there are only a few truly red diamonds that have ever been mined. One million dollars per carat is not unheard of for a rare natural color red diamond.
The clarity grade of a diamond is determined by using magnification. The standard is ten power magnification, by use of a microscope and also by viewing with an instrument called a jeweler’s loupe. These hand held instruments are not easy to use without lessons and practice. So, as a consumer, do not expect to purchase one of these and see the inclusions. They are however, helpful for viewing laser inscriptions that might be present on the diamond for identification.
Diamond grading is a subjective process. However, trained professionals should be very close in their observations and conclusions. The higher the clarity grade, the rarer the diamond is and of course the more expensive it is.
The highest clarity grade is FL or IF. These stand for Flawless and Internally Flawless. These diamonds have no imperfections seen under 10x magnification.
The next two grades grouped together are VVS1 and VVS2. These diamonds are defined as Very Very Slightly Included. The imperfections in these are so tiny that even a trained grader might have difficulty locating the inclusions. They are usually a minor pinpoint or a few pinpoints as seen under magnification.
Next are the VS1 and VS2 clarity grades. These diamonds are defined as Very Slightly Included. Small pinpoints and feathers might be found in these grades but they are still small relative to the size of the diamond.
Perhaps the most common clarity grades found are SI1 and SI2. That is because nature almost always creates inclusions in diamonds, so we accept them. In the SI category, these grades will usually have inclusions that are easy to see under magnification but not usually visible to the naked eye.
The final clarity grade range includes I1, I2, and I3. The first of these diamonds (I1) has inclusions that may be larger in nature, may be dark, and may be eye visible among other possible attributes. Some I1 diamonds can still be very attractive depending on their individual attributes. I2 is a category where inclusions start to be very noticeable, detracting from overall beauty and potentially even affecting durability. The I3 category is reserved for diamonds that lack beauty and durability. Inclusions are so prominent in these diamonds that many of these will have little or no brilliance because light cannot pass through the diamond and reflect properly.
Note that SI3 is sometimes encountered on some laboratory grading reports or from jewelers selling diamonds. It is important to understand that this grade does not exist in the GIA grading system and is not endorsed by most major grading labs. While it may be represented as “low SI2” or a “bridge between SI2 and I1” or some other terminology, it is clearly a selling term. These diamonds are all I1 clarity at best and while some may attempt to allow only the “high-end” of I1 to get this grade, other diamonds may be anywhere in the I1 range.
The cut of the diamond is often confused with the shape which is actually a completely separate value factor. Cut is all about proportions. When evaluating a diamond for cut, each one of the facets is observed and measured for proper angles, length, and symmetry. A discussion of cut can become very technical. Those that want to study more information about the proportions and angles can do research through available books and online information. Here is some basic cut grade information that applies to diamonds to help understand why proportions are important to the overall look and value of the diamond. Understand that this information is the technical side of diamonds. What is important is how the diamond looks to you. Just because a proportion might not be ideally cut, the diamond may still look good to you and may be priced lower because of this. All information that follows pertains to round diamonds. Fancy shapes have completely different parameters to judge the diamonds.
The table is the flat surface on the top of the diamond. The table is measured in millimeters and then divided by the average diameter of the diamond to get a table percent. 60% is the standard by which we compare as this is a very good table size. As the table gets larger, the light will not be reflected as well. Diamonds with tables above 65% are considered to be very large. Table sizes below 60% are considered to be more in the “ideal” range, down to about 53%. Below that, the table may be considered too small.
The depth of the diamond can be calculated by dividing the total depth from the top to the bottom of the diamond by the average diameter. Again, 60% is the standard for judging. If the diamond is too deep, it may appear dark. If the diamond is too shallow, it may lose brilliance as light leaks out. Normally, for a round diamond 57.5% to 63% is the preferred range.
This is the edge that runs around the entire diamond where the top and bottom of the diamond meet. If the edge of the diamond is too thin, it might damage easily and get small chips and abrasions. If the girdle is too thick, it may alter the overall beauty and it also adds unnecessary weight. The possible sizes of girdle thickness are Extremely Thin, Very Thin, Thin, Medium, Slightly Thick, Thick, Very Thick, and Extremely Thick. The normal range of acceptance for a girdle is Thin to Thick.
The culet is the point at the bottom of the diamond. The diamond should either have no culet (sometimes described as pointed), or be very small or small and possibly medium in size. A large or very large culet adds unnecessary weight and also affects the cutting angles of the pavilion (bottom) of the diamond.
Polish and Symmetry
These two features are considered the finish of the diamond. They reflect the skill and care taken by the cutter of the diamond. While they are microscopic in nature and rarely visible to the eye, they can affect the overall brilliance and beauty of the diamond. The grades for these are Excellent, Very Good, Good, Fair, and Poor. Most diamonds today are cut with Good or better finish features. Prior to 2006, cut grades were not used by the GIA grading laboratory. Some other labs did use cut grades based on their own research and standards. For example, the AGS laboratory used a cut grade system that started at 0 as the “ideal” cut and went down from there (1, 2, 3). In 2006, the GIA introduced new cut grade standards but only for a standard round brilliant diamond. The cut grades are Excellent, Very Good, Good, Fair, and Poor.
The carat weight of the diamond is determined by weighing the diamond on an accurate electronic balance scale. One carat equals .2 gram, so one gram would equal five carats. In the trade, these scales can be very expensive to obtain the accuracy down to the thousandth of a carat. The final representation is usually to two decimal places, though some labs will show the third decimal place. So, a one-half carat diamond would be represented as .50 carat, a one-carat diamond would be represented as 1.00, etc. An accurate weight is very important because the pricing is based on this weight, and there are significant differences in price sometimes over just one one-hundredth of a carat. A diamond that weighs .99 carat is lower priced than a diamond that weighs 1.00 carat
In the international gem trade, the standards for weight representation are different than some local laws and standards. This can make things confusing. In the international trade, you can only round up to the nearest one-hundredth of a carat if the thousandths place is 9. If it is 8 or below, it must be truncated. So, a diamond that weighs .998 carat is bought and sold in the trade as .99 carat. If it is .999, then the diamond can be rounded to 1.00 carat. The confusion occurs if a store wants to sell the diamond based on local laws that might disagree with this method. In the U.S., the Federal Trade Commission Guidelines state that normal mathematical rounding applies, so a diamond that weighs .995 can legally be sold as a 1.00 carat diamond. But since most one carat diamonds have grading reports from a recognized trade laboratory and most jewelers follow the trade rules, this diamond would be sold as .99 carat.
Diamonds are more expensive per carat as each new carat weight category is reached. The international diamond trade generally uses the following carat weight categories.
¼ carat .23 to .29
1/3 carat .30 to .36
3/8 carat .37 to .43
Light ½ carat .44 to .49
½ carat .50 to .69
¾ carat .70 to .89
9/10 carat .90 to .99
1 carat 1.00 to 1.19
1 ¼ carat 1.20 to 1.49
1 ½ carat 1.50 to 1.99
2 carat 2.00 to 2.99
Note that there might be slight premiums in some of the above categories as diamonds get closer to the next category.