Lifestyle Magazine

What Determines Diamond Pricing?

By Raymondleejewelers @raymondleejwlrs

You already know I can’t tell you how much a 2 carat diamond costs. And I can’t tell you exactly why any given 2 carat diamond costs exactly what it does. I can, however, let you know factors that give us diamond pricing.

Gabriel NY Double Halo Engagement Ring

Diamond pricing is determined by a delicate balance of a ton of characteristics. Everything from the “threat” of man-made diamonds to color and clarity treatment, to the state of world affairs affects a diamond. All of this in addition to the diamond’s inherent characteristics (and if you think things end with the 4C’s, just know that Cut itself has a dozen odd additional metrics.)

But because you’re here for a quick answer, not a graduate gemologist’s degree, here are two big things that determine diamond pricing.

Weight

Simon G Halo Engagement Ring

Simon G halo engagement ring

Carat is the biggest determiner of diamond pricing, no doubt about it. Yes, the 4 C’s work together to make a diamond beautiful, and yes the final price is a blend of each factor’s impact. But carat weight reigns supreme over the other factors.

Diamonds are priced per-carat. Even those that aren’t even a full carat. So if a .50 carat diamond’s characteristics bring it to the $1600 per-carat category, it will cost $800. Its .58 ct twin would be $928. But a diamond with all the exact same characteristics that weighed over one carat? That’s where things get tricky – you can expect to pay at least 20% more for those extra decimal points.

Diamond prices jump exponentially, because they are based on both the diamond’s weight, and the price-per-carat point. The larger the diamond, the higher the price-per-carat. The larger the diamond, the higher the carat count. And the higher the retail price all around.

This is part of the reason why big box retailers have so many awful diamonds right around one carat. Rather than sacrificing that extra $$ for a tenth of a carat – even if it makes the diamond better cut and therefore more beautiful – cutters will keep the dead weight and sell a more profitable, passable diamond. A flat, lifeless 1 carat will often command a higher price than a vivacious, lovely .78 carat. And the mall stores know this. And that’s why it’s easy to think they specialize in diamond-shaped glass engagement rings at first glance.

Rap

Princess cut Verragio engagement ring

Verragio engagement rings

The next huge factor is the funnel of information that affects the diamond trade. That aforementioned $1600 for a one carat round brilliant? Where does that come from? Mostly from Rapaport’s weekly diamond price list. This is an index of diamond prices, per carat, for various color, clarity and carat weight diamonds of different shapes. It’s about as simple as deciphering runes, and as objective as a beauty pageant judged by the contestants’ own mothers. It forms the baseline for diamond pricing, which is then creatively and colorfully interpreted by the lovable maniacs who makeup the diamond dealing industry. Diamonds typically sell (in the trade) within 15-20% of the Rap price. A good jeweler will help you navigate the insane price jumps between color grades and steer you towards the prudent investments (like clarity!) However, Rap’s prices are also based on GIA certificates. And we won’t re-open that can of worms today, right? Right. Because rock beats paper and you can spot a beautiful diamond when you see one.


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