Last updated on October 9, 2020
Have you ever wondered how diamond prices are determined? Why does one diamond cost $1,000 while another stone of the same size sells for more than $5,000? What makes two stones so different? Let’s see how diamond pricing works.
How Diamonds Are Priced?
Diamonds are priced per carat. For example, if a 0.50-carat diamond costs $2,000 that means the price per carat is $4,000 (0.50 carat x 2 = 1 carat). Another example, if you see a 1.25-carat diamond that costs $6,500 per carat, then the total price would be $8,125 ($6,500 x 1.25 carats).
To get the total diamond price, use the following formula:
Total Diamond Price = Price per Carat x Carat Weight
If you check the prices at most diamond retailers, the price for any particular stone will most likely be a total price. But these prices are still based on the above-mentioned formula.
Remember that prices per carat go up the bigger a diamond gets. The increase is due to the fact that bigger diamonds are rarer compared to small ones.
Diamond Prices Go Up at Popular Carat Weights
While the price goes up when carats increase, prices jump sharply at popular carat weights such as 0.50, 0.75, 1.00, 1.25, 1.50, 2.00 and so on. Such carats are in greater demand and therefore more expensive.
For example, if a 0.45-carat diamond costs $1200 and a 0.46-carat one is $1,250, a 0.50 carat diamond will cost $1,650.
To save some money buy diamonds slightly below such popular carat weights. Instead of buying a 1-carat diamond, you may opt for a 0.95 – 0.98 one – it will look the same size to the naked eye but will be cheaper.
Diamond Pricing Criteria
There are a lot of factors that go into diamond pricing and here are the most important ones:
If you compare two diamonds that are identical in colour, clarity and cut but have different carat weights, you will see that the bigger stone is much more expensive. This means that a 2.00-carat diamond is not twice as expensive as an identical 1.00-carat diamond. The bigger stone will be 3-4 times as expensive or even more.
Colour is another factor that greatly affects the price of a diamond. In general, the more colourless a diamond, the more expensive it is, all else being equal. The more visible and intense tints are, the cheaper the stone is.
Clarity refers to the absence of visible inclusions and flaws in a stone. Diamonds that have more visible imperfections are cheaper. On the contrary, stones that are cleaner or have no inclusions are much more expensive.
The cut quality of a diamond refers to the precision of angles, proportions and symmetry, which directly impact brilliance, fire and scintillation. There is a term “Ideal Diamond Cut” that refers to such proportions and angles when a diamond exhibits maximum brilliance and sparkle. The closer a stone to these ideal proportions, the more expensive it is. On the contrary, diamonds that are not as proportional are cheaper.
Shape refers to whether the stone is round, oval, square, etc. The shape is different from the cut, although these two terms are sometimes used interchangeably. As a general rule, more popular shapes such as round are more expensive compared to others.
Why Do Diamonds with the Same Colour, Clarity, Cut, and Carat Weight Still Differ in Price?
When comparing two identical diamonds, you may notice that they still differ significantly in price. The reason is that other factors affect diamond prices as well.
Some diamonds fluoresce when exposed to UV light. The presence of fluorescence usually lowers the price as it can cause a diamond to appear hazy.
Polish refers to how smoothly the surface of a diamond is polished. A lower polish grade diamond costs less compared to the one with a higher grade.
Symmetry refers to how well-shaped the facets are and how symmetrical their positions are with respect to each other. Diamonds with higher symmetry are usually more expensive.
Diamonds with too thick or too thin girdles often cost less. Too thick girdles make the proportions of the stone less than ideal, while too thin girdles are prone to chipping.
The culet is a small facet at the bottom of a diamond placed parallel to the table. It prevents chipping and abrasion to the point.
Size of the culet can affect face-up appearance of the diamond. Preferably the culet should not be visible with a naked eye which is why None, Very Small or Small culet falls in the “Excellent” range. Large culets are visible through the top of the stone and can affect its pattern of light return, which is why such stones are often discounted.