Diamond Wise: Facts You Should Know before You Buy or Sell that Engagement Ring

Many believe that if you have a handle on the Four C’s—color, clarity, carat and cut—you will be able to successfully navigate your way through the buying or selling process.

Buying and selling diamonds can be both easy and then complicated. Many believe that if you have a handle on the Four Cs—color, clarity, carat and cut—you will be able to successfully navigate your way through the buying or selling process. But what about actual pricing?

Knowing how diamond pricing works, the wholesale price through the various markups at the retail level, is to understand why a diamond can’t be cheaper (sorry, less expensive) by large amounts. Stick with me as I’ll cover where prices originate, how to find an appraiser and what to expect concerning value and services when trying to buy or sell a diamond, what grading reports or certificates to look for and why they are important.

Having a basic knowledge of these facts will help you understand the market and the diamond trade. I am not going to go into detailed sales statistics or cite numbers of how many are sold or things like that; if you want them, leave a question in the comments section below and I’ll answer them.

Now, on to the basic information of the Four C’s.

So what is a diamond? Simply put, a diamond is carbon—the same as in pencil lead; it just has a lattice structure of the atoms that cause it to become the hardest natural substance known to man. Which means it can’t be scratched. But it can be chipped and damaged if hit with a hammer or banged on your car door. A diamond will also hold an adamantine polish to give it an excellent luster. Also, diamonds don’t shine; they reflect. Diamonds, when cut well or properly proportioned, return light to the eye by entering the top and reflect off the pavilion (the bottom) and returning back to your eye from the top. So it does not need light from the side of the stone to give you the brilliance from the top.

Figures 1 and 2 show the facets of a round brilliant diamond.


A brief background the ideal cut came about by a mathematician named Marcel Tolkowsky in 1919, who figured the best proportions to cut a diamond for the best return of light to the eye. Today, this is called the ideal cut and has been marketed to the public as the best cut under many names. It has been widely used for nearly a century, but I have found that many people don’t like it or can even see the difference unless shown though special loupes. Still, when things are marketed correctly, people buy them.

A slightly larger table makes the diamond appear slightly larger (when set with four prongs—with the tip of the prong just touching the point of the star facet—the diamond will appear larger).

NOTE: A six-prong setting, to my knowledge, is no better than four because, really, only four prongs are holding in the diamond when properly set. In most cases, the six prongs make the diamond look smaller.


So, now let’s talk about the grading of a diamonds color and clarity. Color is the body color of the diamond. Obviously, colorless is the best, but if it has to have a tint, yellow is preferable. However, it could also lean toward brown, which would lower the value. The color grading scale most widely used and accepted internationally today was developed by the Gemology Institute of America (GIA) more than 60 year ago. The color scale goes from D to Z anything graded darker than a Z is a Fancy color and the topic of a different article (diamonds come in all different colors, by the way, from reds to blue to orange and so on, occurring naturally; they are quite rare and expensive).

Diamonds graded D-E-F are colorless; G-J are near colorless; K-L are slightly tinted; M-O are noticeably tinted; and P on down are visibly yellow to the naked eye. Grading a diamond takes education and practice. Labs do it under ideal conditions with unmounted diamonds (which we’ll talk more about later). With practice, one can grade a diamond in the setting in the right kind of light.


Clarity grading is about the imperfections in a diamond. These imperfections are judged by their size, nature, type and location in the diamond. Diamonds are classified by a trained grader under a 10-power magnification and the grades are:

Flawless, in which the diamond is free from all imperfections on the surface and internally;

• Internally Flawless, which are free from inclusions but may have small surface imperfections on the girdle (the edge) of the diamond;

Very, Very Slightly Included 1 & 2 (VVS1, VVS2) grades have small imperfections, in most cases the size of a pinhead. They are placed in the VVS1 or VVS2 category, depending on their location, size and type;

Very Slightly Included (VS1 & VS2) grades have imperfections that are larger and more easily seen, again depending on their size, nature and location;

• The next grade is Slightly Included 1& 2 (SI1 & SI2). Again, here the imperfections are larger and more easily seen then the VS category. In some cases, even some people not in the trade can see them without magnification. Depending on the size, nature and location, the diamonds will be placed in the SI1 or SI2 category;

• The final grades are the imperfect grades 1, 2 & 3 (I1, I2 & I3), also known as the included grades, to be politically correct. With these grades, the imperfections are seen by the eye and affect the appearance of the diamond. The placing of the diamond in the I1, I2 or I3 category depends on how much is diamond and how much is imperfections. The I2 & I3 categories are sometimes referred to as “frozen spit.” Keep in mind that a diamond can’t have carbon in it. It might have an inclusion that is black, but it is not carbon. It could be a smaller diamond crystal that has a skin on it or appears black because of its orientation.


OK, so now you have a basic understanding of the grading, so let’s talk about weight measurements. A diamond is weighed in carats and not Karats, which is for the karatage of gold. Carats are broken into a point system, so there are 100 points in a 1.00 carat. A 0.50 carat is a half a carat (note no “s” on the end of the word carat; only when the weight is more than 1.00 is a carat spoken as in “carats”), 0.25 is a quarter and so forth. One point, or 0.01 carat, is equal to 2 milligrams, so 1.00 carat is 200 milligrams or 0.20 grams.

Now, how does the weight affect the value? Well, the same graded diamond (color and clarity) is a different price per carat (see price list at The Rapaport Diamond Report & The Gem Guide websites; links below), depending on its size multiplied by the weight by the price per carat will equal the value of the diamond (W x P/C = VOD or value of diamond). A 0.10 carat diamond is a different price per carat than 0.20 carat, which is going to be different than a 0.50 carat. This will begin to make more sense as we go on.

Value and Pricing

One more important facet before we continue diamonds are also priced by their shape, rounds being the most expensive and the other shapes are then discounted from there. The prices guides reflect this difference in price which I’ll cover below

Diamonds have published price guides or indicators which are used by the trade to set prices. The two most widely used are The Rapaport Diamond Report and The Guide, which also has prices on colored stones. Both publications provide useful and important information of the industry and markets. The Guide also gives in-site to valuations.

The Rapaport report publishes two lists, one for round and one for pear-shapes (or fancy shapes), while The Guide publishes several charts for rounds, pears, emerald-cuts and what is called in the trade a princess cut (or a square-cornered modified brilliant cut). Discounts are given off the lists (Rapaport) if the market so indicates, where I have found The Guide to already reflect some of those discounts. The Rapaport report comes out weekly and The Guide bi-monthly. Most pricing indicators or lists are set up the same way, in a grid with the clarity grades across the top and the color grades “D” to “M” on the side. They are broken into the sizes and price per carat for that size category. So a 0.10 carat diamond is different than a 0.20 carat, which is different than a 0.40 carat. These are broken down into small categories until we reach a full carat, where is broken into carat sizes and with them into half carat sizes.

A sample page from The Rapaport Price Guide (click to enlarge).

A sample page from The Guide (click to enlarge).

So to recap: Let’s say we have a 0.50 carat (half a carat) diamond rated a G for color and VS2 in clarity. The chart says it carries a $3,100 price per carat, so we would take the price per carat (p/c $3,100) and multiply it by the weight of the diamond (0.50 carats), which set the value of the stone at $1,550.

Whereas a diamond that is 0.75 carat (¾ of a carat) with the same color and clarity (G/VS2) is $3,780 per carat. So again, we will multiply the weight of the diamond 0.75 carat by the price per carat $3,780, which will set the price for the stone at $2,835.

This is basically how to estimate the cost of the diamond. There has become a fine line between retail and wholesale of a diamonds. In our next article, we’ll cover diamonds pricing from wholesale to retail, Internet research, what you should except to get from an appraisal and an appraiser, and what an appraisal actually is.

As always, please feel free to contact me if you have questions or concerns. You can ask a question or leave a comment in the comments section below or you can reach me by e-mail at ealcas@msn.com or at my Atlanta Jewelry Appraiser website.

Edward Lewand, GG, ASA, AAA is a graduate gemologist and an accredit appraiser from the Appraisers Society of America and a certified member of the Appraisers Association of America. He is also the director of the Antique Jewelry and Art Conference “Jewelry Camp” and educational program on jewelry and small antiques.

This year’s Jewelry Camp program, to be held on Aug. 1-3 in Atlanta, Ga., will include lectures and hands-on demonstrations about diamonds and antique and estate jewelry. Will Seippel, the founder and CEO of WorthPoint, will present a class on online research.

Edward is available for lectures for luncheons, clubs and charitable events and fund raisers by offering appraisal days.

All rights reserved republication with permission.

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