The Cost of Diamonds

The few times you usually hear about cost, it is usually as a “salary guideline” or “buying tips” which may include “advice” to spend about two months salary on a diamond engagement ring. Would you like to know where the idea of two month’s salary came from? A marketing person whose job it is to sell as many diamonds as possible. The reality is that there’s no “guideline”. There are too many personal factors to consider.

You know your financial situation better than anyone. You have to decide on a budget for how much you want to spend, and/or can afford to spend, and then go out and see what that budget can buy.

What factors contribute to the cost of diamonds?

Let’s take a typical diamond, and change the various properties to see how it affects the price:

Carat

A Diamond of G color and SI¹ clarity will be in one category of prices when it is between 0.50 – 0.69 carats. When you take that same quality diamond and increase the size to the next price category, which is the 0.70 – 0.89 carat range, the price increase will be approximately $1,100 per carat. Increase to the 0.90 – 0.99 carat range, and the price increase will be approximately another $800 per carat. Increase to 1.00 – 1.49 carat range, and the increase will be approximately another $800 per carat. Increase the carat weight to the 1.50 – 1.99 carat range, and the price increase will be approximately $1,200 per carat.

Read more about diamond carat weight…

Color

The color of a diamond has the second biggest impact on its price, after carat weight. For color, let’s take a typical Diamond for an example, and see what happens when we take it through different color grades. Let’s start with a 1.00 carat diamond of K color and VS¹ clarity. If you move up to an H color, you will pay approximately an extra $1,700 per carat. Move up to F color, the increase will be approximately $1,100 per carat. Improve the color to D and the increase will be approximately $900 per carat.

Read more about diamond color…

Clarity

Let’s start with a 1.00 carat Diamond of G color and SI¹ clarity. If you move up to a VS¹, you will pay approximately an extra $1000 per carat. Move up to VVS¹, the increase will be approximately $700 per carat. Improve the clarity to IF and the increase will be approximately $700 per carat.

Read more about diamond clarity…

Cut

Cut is a bit more complicated and depends on various factors, like the quality of diamond you are considering. Ideal cuts are generally much more expensive than the others. But it needs to be judged on a case by case basis.

Read more about diamond cut…

Pricing Terminology in the Diamond Business

We would like to clear up some confusion as to how pricing works in the diamond industry. The price of loose diamonds in the wholesale market is stated in dollars (Pesos, Dineros, Shekel, Italian Lira…) per carat. This figure is multiplied by the number (or fraction) of carats being bought.

Example 1:
Jeweler buys 40 carats worth of Diamonds from Dealer at $2,000.00 per carat =
$2,000 X 40 carats = $80,000 (for 40 carats-worth of stones).

Example 2:
Consumer buys 0.50 carats worth of Diamonds from Jeweler at $3,000.00 per carat =
$3,000 X 0.50 carats = $1,500 (for 1 stone).

Sometimes jewelers will quote to retail customers a per carat price or sometimes they will quote a price per stone. So a 0.50 ct. diamond can be quoted as $3,000.00 per carat, which comes to 0.50 x $3,000.00 = $1,500.00 for the diamond, or it can simply stated as $1,500.00 per stone. When buying a piece of jewelry which may contain one or more type of gem, the price will always be per piece.

Total Weight

When you see T.W., or Total Weight, it will refer to the total carat weight, per gem type (at least they should and usually do break it down by gem-type). So a ring with emeralds and sapphires and diamonds could say:

Example 3:
Emerald t.w. = 0.25 cts., Sapphires t.w. = 0.31 cts., Diamonds t.w. = 0.75 cts.

This refers only to the weight as measured when the gems are loose and unmounted. It has nothing to do with the number of gems contained in the jewelry. The above example could mean there were 5 emeralds, 7 sapphires, 100 diamonds as easily as it could mean that there were 2 emeralds, 2 sapphires and 2 diamonds.

Quick Carat Cost Question:

Which would be more valuable? 100 diamonds with a t.w. (total weight) of a carat? Or 2 diamonds with t.w. of a carat?

Answer: 2 diamonds! Why? Because carat, which is the second “C”, is more valuable the bigger it is. One diamond of 1 carat is worth more than two diamonds of 1 carat.