Diamonds are valued based upon their rating under a series of various determinants
Carat weight, Clarity, Color and Cut.
Carat
The carat weight measures the mass of a diamond. One carat is defined as a fifth of a gram, or exactly 200 milligrams (about 0.007 ounce). The point unit—equal to one one-hundredth of a carat (0.01 carat, or 2 mg)—is commonly used for diamonds of less than one carat. All else being equal, the value of a diamond increases exponentially in relation to carat weight, since larger diamonds are both rarer and more desirable for use as gemstones.
Total carat weight (“TCW”) is a phrase used to describe the total mass of diamonds or other gemstone in a piece of jewelry, when more than one gemstone is used. Diamond solitaire earrings, for example, are usually quoted in TCW when placed for sale, indicating the mass of the diamonds in both earrings and not each individual diamond. TCW is also widely used for diamond necklaces, bracelets and other similar jewelry pieces.
| Carat Size | Cost Per Carat (US$) | Total Cost (US$) |
| 0.5 Carat | $3,000 | $1,500 |
| 1.0 Carat | $6,500 | $6.500 |
| 1.5 Carat | $8,500 | $12,750 |
| 2.0 Carat | $13,000 | $26,000 |
| 3.0 Carat | $17,000 | $51,000 |
| 5.0 Carat | $23,000 | $115,000 |
Clarity
Clarity is a measure of internal defects of a diamond called inclusions. Inclusions may be crystals of a foreign material or another diamond crystal, or structural imperfections such as tiny cracks that can appear whitish or cloudy. The number, size, color, relative location, orientation, and visibility of inclusions can all affect the relative clarity of a diamond. The Gemological Institute of America (GIA) and others have developed systems to grade clarity, which are generally based on those inclusions which are visible to a trained professional when a diamond is viewed from above, under 10 x magnifications.
Diamonds become increasingly rare when considering higher clarity gradings. Only about 20 percent of all diamonds mined have a clarity rating high enough for the diamond to be considered appropriate for use as a gemstone; the other 80 percent are relegated to industrial use. Of that top 20 percent, a significant portion contains a visible inclusion or inclusions. Those that do not have a visible inclusion are known as “eye-clean” and are preferred by most buyers, although visible inclusions can sometimes be hidden under the setting in a piece of jewelry.
Most inclusions present in gem-quality diamonds do not affect the diamonds’ performance or structural integrity. However, large clouds can affect a diamond’s ability to transmit and scatter light. Large cracks close to or breaking the surface may reduce a diamond’s resistance to fracture. Diamonds are graded by the major societies on a scale ranging from flawless to imperfect.
Color
A chemically pure and structurally perfect diamond is perfectly transparent with no hue, or color. However, in reality almost no gem-sized natural diamonds are absolutely perfect. The color of a diamond may be affected by chemical impurities and/or structural defects in the crystal lattice. Depending on the hue and intensity of a diamond’s coloration, a diamond’s color can either detract from or enhance its value. For example, most white diamonds are discounted in price as more yellow hue is detectable, while intense pink or blue diamonds (such as the Hope Diamond) can be dramatically more valuable.
Most diamonds used as gemstones are basically transparent with little tint, or white diamonds. The most common impurity, nitrogen, replaces a small proportion of carbon atoms in a diamond’s structure and causes a yellowish to brownish tint. This effect is present in almost all white diamonds and in only the rarest diamonds is the coloration due to this effect undetectable.
In contrast to yellow or brown hues, diamonds of other colors are much rarer and more valuable. While even a pale pink or blue hue may increase the value of a diamond, more intense coloration is usually considered more desirable and commands the highest prices. A variety of impurities and structural imperfections cause different colors in diamonds, including yellow, pink, blue, red, green, brown, and other hues. Diamonds with unusual or intense coloration are sometimes labeled “fancy” by the diamond industry. Intense yellow coloration is considered one of the fancy colors, and is separate from the color grades of white diamonds. Gemologists have developed rating systems for fancy colored diamonds, but they are not in common use because of the relative rarity of colored diamonds.
Cut
Diamond cutting is the art and science of creating a gem-quality diamond out of mined rough stone. The cut of a diamond describes the manner in which a diamond has been shaped and polished from its beginning form as a rough stone to its final gem proportions. The cut of a diamond describes the quality of workmanship and the angles to which a diamond is cut. Often diamond cut is confused with “shape.”
There are mathematical guidelines for the angles and length ratios at which the diamond is supposed to be cut in order to reflect the maximum amount of light. Round brilliant diamonds, the most common, are guided by these specific guidelines, though fancy cut stones are not able to be as accurately guided by mathematical specifics.
