Diamonds Cost So Much - Why is that?

Diamonds cost a lot of money, have you asked yourself why that is?  If you want to know, here is what makes the diamond a high priced "commodity."


Diamonds are Rare!  Diamonds of larger size, better quality and whiter color are even rarer.  Each one of these attributes is important in its own right and adds to the value of a diamond.  Other things which add value to a diamond are certificate, shape and cut.

Consider this, a cut diamond of one carat is produced from every 250 tons of soil which is mined.  It's much rarer then a half of a carat stone which is why the price for diamonds rises disproportionate to it's size.  Also, consider the fact that diamonds which are colorless, meaning fall into the D-F color range, only make up 2 percent of all diamonds mined.  Clarity is also important and Internally Flawless diamonds are quite rare.

Here it is important to note, for the diamond buyer to be.  You will not see a difference in diamonds of VS clarity and Flawless Diamonds without magnification.  At this point you really are paying for the fact that the diamond is more or less rare then the others.

Diamonds in the D to F color range are Colorless when observed from the top.  This means that you will not see a difference unless you take the diamond out of the ring and place in face down on a white surface next to a lighter color stone.  Diamonds in the G to J have slightly noticeable color, and most people recommend buying G or H for white metal settings, if you don't have a budget for F color.

The other thing which determines the price is a certificate.  Consider that when you're buying a diamond with a certificate which states that a diamond is better then it really is, you are only fooling yourself.  It is now understood that diamonds with GIA or AGS certificates have a premium, because these labs give the real grades.  EGL and many other laboratories give higher grades then the stone really is and that is why a stone with the same grades but from EGL cost less.

The last important thing which effects the price is the Shape and Cut.  They are listed here together because they are a part of the same issue.  When a round diamond is cut from a rough stone, fifty percent of the rough is wasted on average if the stone is cut in ideal proportions.  A diamond does not, however, need to be cut to ideal proportions.  Many cutters choose to cut a diamond slightly deeper to save more of the rough or shallower, so that two diamonds can be made from one rough stone.  As you can understand, the buyer has to pay for an ideal stone more because the cost is simply higher.  Shapes other then round are also chosen for the same reason, to save more of the rough.  A princess cut diamond, a square from top, is cut very similar to the round.  However, since a diamond crystal is square cutting a princess cut diamond saves eighty percent of the rough and wasts only twenty.  When a diamond crystal is not perfect, the cutter chooses the best shape to maximize yield.  For this reason fancy shape diamonds are always cheaper then the round. 


It's also worth mentioning that currently there is no cheap synthetic diamond on the market.  The cheapest synthetic, which is practically the same thing as a real flawless diamond, casts about one third of the price to make.  This and the demand for real diamonds helps keep the prices of diamonds high.