How Diamonds Are Valued According To The Four C's

Diamond investment has increased over recent years, but it’s not worth much if you are actively taking part in this process without really knowing or even understanding the core concepts to diamond investment. In this sense, you need to have a decent level of knowledge when it comes to purchasing and investing in diamonds, otherwise you are likely to end up paying far too much for the diamonds and not really making any money when the time comes to sell them.

The best place to start is by learning about what constitute to the four c’s within this type of investment. Put simply, the Gemological Institute of America (GIA) grades diamonds according to the four c’s which are known as cut, colour, clarity and carat weight. All of these individually add up to determine the value of each diamond.

When a diamond’s size or carat weight increases, the value of the diamond will also increase. This can also rise and fall depending on the clarity, cut, and colour as these are the other factors which all have an impact on the price of a diamond.

Carat

We have all heard of the term, and we know that the higher the carat, the more valuable the diamond will be; this essentially determines how heavy it is. Carat is simply a measurement of weight and not size, a common mistake that many people make.

As gems with a very high carat are extremely rare to find, they are much more valuable. A recent example of this was the 110 carat, vivid fancy yellow diamond, which was auctioned and sold for £6.89 million in Geneva. Remember to make sure you don’t get carat mixed up with karat, as karat means the purity of gold and is separate from the weight.

Clarity

This relates to the number of spots, or what’s known as inclusions in a diamond. You may have noticed that when you hold a diamond, the light shines through and is retracted out. If there are inclusions on the diamond then part of the light is lost. This can act as one way to measure the consistency of the diamond. These inclusions are based on a scale from the GIA, ranging from FL (Flawless) to Imperfect (I). These are based on the inclusions when magnified ten times, as the inclusions are not visible to the naked eye. As flawless diamonds are the rarest and feature no inclusions, they’re also the most expensive.

Cut

Number three of four in the four c’s is known as cut. This refers to how the diamond is shaped once it is crafted in terms of angles and proportions. The diamond will be rough when it is found and then a craftsman will shape it which takes an incredible amount of skill. When a diamond is too deep or even too shallow, light will be lost and in this sense these diamonds are not as valuable. This is the only factor that is affected by humans, the rest are the result of nature. Different diamond shapes will have separate guidelines when it comes to deciding on how well they are cut.

Colour

Finally we have the colour of a diamond. Some diamonds are clear and others are a range of different colours; when the diamond is one fixed colour the value will increase. The GIA also has a scale to measure the colour of a diamond as well, ranging from D – Z (D being colourless). This ‘c’ can be very difficult to measure and so the diamonds are tested under controlled lighting conditions to establish the diamonds worth.

By: Vincent A Rogers

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Vincent Rogers is a freelance writer who writes for a number of UK businesses. For more information on Diamond Grades and Colouring contact Stone House Global Markets