How to evaluate diamond's value?

Introduction

Diamonds have very high price tag, and thus it is important to evaluate diamond's value prior to actually buying it. The evaluated value of diamond is usually the same in all the countries across the globe, and this is because all countries have identical properties to judge diamonds by, and these properties are summoned in the famous 4 C's (color, cut, clarity, and carat).

Evaluation done by the gemological institute is also a contributing factor that affects diamond’s price. The most recognized gemological association is Gemological Institute of America (GIA). GIA has long history in performing evaluations on diamonds because they were first laboratory in America to issue modern diamond reports and evaluations and are known for their consistency. Evaluation is very important especially when judging color and clarity because here is very much needed professional assistance and experienced eye unlike carat weight and cut angles that are mathematically defined. Among other highly judged evaluation societies are also American Gemological Society and Diamond High Council located in Antwerp, Belgium. Antwerp is the major city of world's diamond industry.

Basically if we are talking about diamond that is worth lot of money then the best thing would be to contact GIA, and obtain Diamond grading report. Diamond grading report means that diamond has been examined and evaluated by experienced Diamond Graders, using various gemological instruments, and that they have determined that this diamond of yours contains the characteristics as stated in the Report.

The 4 C's

COLOR

The color of diamond plays a key role in determining diamond’s value and beauty and this is the reason why sometimes jewelers set diamonds in groups of similar colors. The diamond color scale usually starts from D meaning best blue White to Z meaning dark colored diamonds. This scale has been widely accepted in almost all countries superseding some older scaling systems.

It’s also important to mention that professional grading labs judge color of individual diamond from the side of the diamond and not from the top. Diamonds graded D-F are considered "colorless", G-J are considered "near-colorless", K-M are "slightly colored", N-Y usually appear light yellow or brown.

Chemically speaking perfect diamond is perfectly transparent with no color, but in reality there’s no absolutely perfect diamond. Diamond’s color depends on chemical impurities and structural defects in crystal lattice of diamond.

Diamond’s color can detract or enhance its value which depends on the hue and intensity of diamond’s coloration which can have great effect on diamond’s price. For instance if there’s a detectable yellow hue in diamond this will increase the price of the diamond while on the other hand intense blue color will be much more expensive.

Majority of diamonds used in jewelry pieces are white diamonds. Nitrogen is the most common impurity giving diamond yellow or even brown color. Rarity is very important factor when talking about diamond’s color because for instance diamonds graded Z are rare and therefore expensive and so are bright yellow and some other colors.

Only yellow and brown hues are often, except earlier explained exceptions meaning that diamonds of all other colors are rarer and therefore more expensive. These colored diamonds are often labeled as “fancy” diamonds because of unusual colors of these diamonds. There’s also a rating system for this diamonds developed by gemologists although not in common use because of rarity of these diamonds.

CUT

Cut refers to the manner in which the diamond has been shaped, or to be more precise to the proportion, symmetry and finish of a polished diamond. The cut of certain diamond describes the quality and the skilled hand of the master cutter.

Cut gets often confused with shape because there are a number of traditional diamond shapes. Round brilliant diamond is the most popular shape. Round brilliant diamond if well-cut reflects the maximum light and sparkles more than any other used shape. Round brilliant diamonds are guided with mathematical guidelines for the ratios of angle and length in order to reflect maximum amount of light. Round brilliant diamond is also the most expensive shape because 50 % of the rough diamond gets lost while cutting a round shape which is much bigger loss than other shapes.

Second most popular technique is known as "princess cut diamonds" which is basically a square shape. This technique is used rarely compared to round brilliant diamonds, because 80-85 % of diamonds gets cut to round brilliant and only 5-10 % are "princess cut diamonds".

Cutting technique is all about getting the better sparkle and is vital factor to visual impression of diamond. Diamond cutting is a technique that has been developed through many centuries with its greatest moments in person of Marcel Tolkowsky. This mathematician and gemologist developed the round brilliant cut when he calculated ideal shape to return and scatter light when watching diamond from above. This is the table of Tolkowsky’s perfect dimensions.
Tolkovsky defines ideal dimensions to have:

* Table percentage (table diameter divided by overall diameter) = 53%
* Depth percentage (Overall depth divided by the overall diameter) = 59.3%
* Pavilion Angle (Angle between the girdle and the pavilion) = 40.75°
* Crown Angle (Angle between the girdle and the crown) = 34.5°
* Pavilion Depth (Depth of pavilion divided by overall diameter) = 43.1%
* Crown Depth (Depth of crown divided by crown diameter) = 16,2 %


This ideal Tolkowsky’s dimensions have unfortunately very small area in which diamond can be considered perfect and any declination from these dimensions means less reflected light. Since today is a certain financial premium for a diamond that weighs 1,0 carat or more, many diamonds are being cut very poorly just to get pass this magical weight.

In order to achieve ideal, round brilliant diamonds aren’t allowed to have depth percentage that is bigger than 62,5 %, and overall diameter of typical round brilliant 1,0 carat diamond should be about 6,5 mm, because diameter of a round brilliant should be about 6,5 times bigger than the cube root of carat weight.

Of course, definition of ideal cut is sometimes very subjective and thus subject to many controversies. Although this mathematical model of Tolkowsky was a real breaking point, it’s been superseded by the GIA Facetware software.

Some fancy cuts like baguette, marquise, briolette pear cuts are used too although they aren’t holding the same precise Tolkowsky standards and are great deal influenced with fashion.

Diamond cutters for instance prefer more princess cut style than the round brilliant because less material gets wasted in princess cut. Some cuts even include extra facets, although their improvement value compared to Tolkowsky's model stays doubtful.

The cut quality is by many jewelers considered to be most important thing when judging beauty of individual diamond because well cut diamond often appears bigger than it really is, and also has better color and clarity. The cut quality determines the eventual price of individual diamond. Despite the standard called Facetware that was set by GIA, many different theories about ideal cut still exist and are often subject of many controversies.

CLARITY

Most diamonds have internal defects known as "inclusions". Clarity is measure of inclusions that certain diamond has. These inclusions can be crystals, structural imperfections or some other foreign material. The main consequence of these inclusions is that less light passes through diamond which makes diamond less shiny. If these inclusions are small or if there’s a few of them, more light can pass through the diamond, making it more beautiful and of course more expensive.

There’s no gemstone that can produce the amount of brilliance that diamond can. Diamonds that are free of inclusions are very rare and extremely expensive. Clarity of each diamond depends on number, size, location and visibility of inclusions.

Clarity of individual diamond can be affected by two types of inclusions – External and internal. External inclusions are impurities on the surface of the diamond and the interior inclusions are impurities in the interior of the diamond (majority of internal imperfections are the result of breakage in the chemical structure of individual diamond).

The Gemological institute of America and other organizations have developed systems to grade diamond’s clarity. Most common is the use of hand held loupe or microscope based on the 10-power magnification which generally speaking means that any imperfection that is not visible with x10 magnification isn’t really imperfection and isn’t considered while grading diamond’s clarity.

There are ten levels of grading scale from I.F which means internally flawless which is the best and all the way to the P.3-1.3 meaning heavy inclusion that are visible with naked eye. Small numbers of diamonds have good enough clarity to be used in jewelry pieces, only about 20 % of them while others are used in industry.

Although most inclusion don't affect diamond’s structural integrity some inclusions like large clouds or large crack can cause unwanted consequences in form of lack of diamond’s ability to transmit and scatter the light and may even completely reduce diamond’s resistance to breakage.

CARAT

Diamonds were first discovered in India. The first unit of weight that was used for the diamonds was the carob seed or to be more precise the weight of the seed from the seed pod of the carob or locust tree was equivalent to a 1,00 carat diamond. Today, the diamond weight is measured in carats and one carat is defined as 200 milligrams.

The diamond weight is related but is not the same as the diamond size because two diamonds with same shape, with equal carat weight, clarity and color that were cut from the same rough could have different size depending on proportion of each of these two diamonds,and in all cases better cut diamond will look bigger than the one that wasn’t cut that good. The price per carat doesn't increase in exact proportion with diamond size. Diamond prices in fact go up exponentially with carat weight because demand is much bigger for diamonds that are weighing more cause they are very rare to find. For instance doubling the carat weight from one carat to two carat will raise the price more than two times, and this is even more expressed when one diamond’s weight is under one carat and one just above one carat because the one just under 1,00 carat (for example 0,95) will have significantly smaller price than the one that is just above 1,00 carat (for example 1,05) all because of difference in demand. This is all because in average half of diamond gets lost when cutting, which means that for larger cut diamond, larger rough diamond is required and therefore the price increases most steeply with carat.

In determining actual diamond price important role goes to Rapaport Diamond Report, which is weekly diamond price list that is published every week by Martin Rapaport, CEO of Rapaport Group of New York for different diamond cuts, clarity and carat weights. This weekly report is in fact baseline for retail-price because jewelers trade diamonds at negotiated discounts off the Rapaport Price. The phrase "total carat weight" or t.c.w. has become a well known phrase in the world of diamonds and describes total mass of diamonds in some piece of jewelry when more than one diamond is used. Total carat weight is widely used for diamonds earrings, diamond bracelets, diamond necklaces and other similar jewelry indicating the mass of all diamonds used in certain piece of jewelry.