What drives diamond prices on the market? Who determines diamond cost? Why are some stones more expensive than others? What is the role of 4 Cs in the process?
Learn the mystery behind brilliant pricing so you can make an informed decision about your engagement band.
De Beers. A Diamond Is Forever
If you’ve ever shown any interest in raw diamonds, you’ve probably heard about the biggest corporation De Beers. In the past, they used to control 90 % of diamond rough. While companies like Alrosa or Rio Tinto have tipped the scales in their favour, De Beers still own 35-40 % of the global roughs and determine a lot on the market.
Sightholders. Fierce Rivalry
Every season the stone giant De Beers organises a special event. World’s diamond dealers compete for the right to be one of 83 sightholders. These businesses buy precious rocks directly from De Beers ten times a year.
De Beers decide upon the quantity, size and types of raw diamonds they intend on selling to each sightholder. Dealers have no say in the matter; they can either agree to the proposal or return empty-handed. All negotiations are off the table. Furthermore, companies must follow strict regulations and can’t offer products to retailers for a lower price since De Beers monitor the situation and audit their activities.
Dealers who break these rules face serious ramifications. De Beers can exclude them from the deal or provide low-quality gems.
Manipulations of the Market Value
If the prices for brilliants drop, De Beers trade fewer diamonds, thus cutting the supply chain or charging extra for their services. If a new supplier emerges, the company fills the market with identical stones for an extremely low price, and drowns the competitor. De Beers are so protective of their policy that they purchase diamonds stolen from their reserves to prevent robbers from selling stones at a below-market price.
Over the years, diamonds have become a commodity. In this aspect, they are similar to gold. Nonetheless, their pricing is more complex. While ounces of gold are the same, diamonds have to be measured against various systems to establish their value. 4 C’s is a standard grading accepted in all countries, but myriad other properties impact diamond’s value as well.
4 C’s and More
The most efficient way to get yourself a winning deal is to search for the diamonds online or in-store. Many customers are aware of the Colour, Clarity, Cut and Carat parameters, but few know about their subdivisions and variations.
Along with the clarity grades, one may sometimes spot modifiers. For instance, a “high” SI1 (slightly included) signifies a stone nearing in quality to VS2 (very slightly included). On the contrary, the “low” VS2 approaches SI1 and has more inclusions. As you can see, the VS2 grade guarantees neither transparency nor a neat look. We suggest always consulting with the jeweller and asking about these variations. It’s also essential to gauge the actual diamond’s appearance. That is why shopping in person remains the preferred method among grooms-to-be. However, every website now has 3D-views installed to let customers check for any blemishes and observe the diamond in its true form.
Popular cuts like “hearts and arrows” come with a hefty tag because they require greater precision, leading to considerate rough loss.
The shape has an enormous influence on the price too. The trendier it is, the more it costs. Among all options, round remains the most valuable item. If you want to save up, we recommend opting for a princess cut or oval, which do not drastically differ from the traditional one but are tons less expensive.
Eye-clean diamonds without yellow hues are a rarity that’s not easy to come by. Therefore, an excellent grade will set you back 2 or 3 salaries. Brownish and greyish diamonds are more affordable and pair well with modern and vintage designs. If you want to get the most of your stone, we recommend going for the H-D range. Any diamond within these grades will seem apparent to the naked eye.
Strong fluorescence makes the stone look milky and decreases its value. Nonetheless, it can counteract yellow inserts and enhance diamonds’ colour with a G grade or lower. Weak fluorescence won’t affect the general price on a grand scale. However, D-F fluorescent diamonds will be a bit cheaper.
Purchase diamonds from reputable sources that offer warranties and ring resizing services. We, for one, advise considering GS Diamonds jewellery, a family-owned business that runs on reliability and quality standards.