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How is the diamond price per carat determined? Check our diamond price guide to understand better

Diamond Pricing: why it matters to understand the cost drivers


To understand the diamond price calculation is important when buying loose diamonds online. While we can’t set the budget for your purchase, we can outline the most important criteria that affect diamond prices.  In this guide you will learn they how prices are calculated , what influences the prices and the price evolution of the most valuable types of diamonds.


The diamond price: How it’s Calculated

When looking at diamond pricing, there are a few important criteria to keep in mind.

Large diamonds are much less common than smaller ones.

This is the main reason they tend to be more expensive. Thus, the price of 1 carat diamonds tends to be much lower than the price of a two or a three carat stone. Think of it this way – the 2 carat diamond price will be much higher than what you’ll have to pay when you buy two one-carat diamond.

When diamonds are priced, a chart like the Rapaport Price List will be used. The list is more or less a matrix that determines just how attractive and desirable a certain diamond is. Based on these calculations, a price estimate can be made.

If you take a look at a standard Rapaport chart, you will see that the colour, the clarity and the carat will all be considered. In the chart, you’ll see the price of round, parcel, pear and other diamonds. More or less, the chart sets the standard in the industry and is used by merchants to determine the price of all diamonds.

Thus, based on this chart, a one carat diamond can cost anywhere between 3,030 and 26,950 dollars per carat (2,323 to 20,673 pounds). The average wholesale price of a GIA-certified one-carat stone will be in the 3,080 to 26,950 dollars.

In comparison, the price of a two-carat diamond will very often start at 12,000 dollars per carat. Thus, a two-carat diamond will cost 24,000 dollars or more. Moving up even further, the cost per carat for a three carat diamond can start at about 18,000 dollars per carat, bringing the total cost of a three carat diamond up to 54,000 dollars and beyond.


One Carat Diamond Price Evolution: How does it Fluctuate in Comparison to Other Diamonds?

Historically, the price of diamonds has always changed. From 1960 to 2017, the value of diamonds has grown by 14.47 per cent.

As the demand for luxury goods continues to grow and diamond mining remains a constant, analysts predict that the price of one carat diamonds can be expected to increase by six per cent annually in the period until 2020. Until present, the annual increase has been set at approximately four per cent.

Keep in mind that while the Rapaport price chart does have a serious impact on the valuation of diamonds, market forces are also at play. The stability of the economy can be used as an indicator of fluctuations in the price of a one carat diamond – probably the stone that’s most in demand, thus a benchmark in the field.

This isn’t the case for other gemstones, which is why serious fluctuations occur. It’s possible to find one and the same gem that’s massively overpriced due to the lack of benchmarks. While some merchants can definitely attempt to overprice diamonds, it’s much easier for customers to keep a track of a price level that’s adequate for the respective moment.

The history of diamonds suggests one more thing – the price of more commonly found diamonds is stable. These are the 0.5, the one and the two carat stones. Fluctuations are much more typical with larger diamonds because they’re rare.

This is also the reason why the change in price is smaller for 1 carat diamonds than it is for two, three and even four carat stones. The price of a four carat diamond, for example, has tripled in the short period of time between 2004 and 2008. The cost of a 1 carat diamond has not gone up so steeply during this period.

Here’s one more example that can be used to demonstrate the claims about the evolution of diamond prices:  Over the first quarter of 2016, the price of one carat diamonds experienced a zero percent fluctuation. In comparison, diamonds in the two to three carats range became one per cent less expensive and diamonds in the 0 to 0.5 carat range gained two per cent in price. These numbers are a clear illustration of the price stability that the most demanded diamonds experience.


Some of the Other Factors that Affect the price of a diamond

While the carat is obviously the number one consideration as you’ve seen already, other characteristics may be determining for the price as well. Loose diamonds are all unique. There are dozens of permutations out there and each one has at least some impact on pricing.

If you’re considering the purchase of a loose diamond and you’re wondering about the factors that may potentially have an impact on the sum you’ll have to pay, keep the following in mind:


Cut: this is the second of the four Cs – the criteria used to determine the quality of diamonds. As such, the cut will have an impact on the price of the stone. The cut is determining for the manner in which a diamond will reflect light and thus – for its brilliance. A well-cut diamond tends to be much more desirable than a stone that isn’t characterised by a lot of sparkle. Diamonds come with a cut grade in the range from poor to excellent according to GIA. Diamonds that are classified either as very good or excellent in terms of cut will be much more expensive than poor diamonds.

Clarity: the third C also has an impact on the price of loose diamonds. Cloudiness, spots and cracks are all imperfections that interfere with the clarity of a diamond. As such, they can easily bring the price of the stone down. Imperfections are usually examined during an inspection that’s carried out prior to buying the stone. If any defects are noticed, these could easily become grounds for demanding a price reduction.

Shape: there are many diamond shapes out there to choose among – oval, princess, round, cushion and emerald are just a few of the options. Just like the other characteristics already mentioned, the shape can contribute to the brilliance of the stone and impact its price. Round diamonds tend to be the most popular variety with round one carat diamonds making the bulk of purchases. The high demand has contributed to a higher price for round diamonds. In addition, a lot of raw material is removed to give the diamond such a shape, which means that the process is highly wasteful in comparison to how other shapes come into existence.

Colour: this is a metric used to determine the whiteness and transparency of a diamond. There will once again be a grade assigned to each stone and this grade will have an impact on its valuation. A colourless diamond is usually assigned a grade D by GIA and it tends to be the most expensive one. A nearly colourless diamond will have a grade in the range from G to J and it will be the second most expensive option. Diamonds that have a light yellow tint receive a grade in the range from N to R and yellow diamonds are the least expensive ones that get assigned a grade from S to Z.

Certification: some authorities refer to certification as the final C because it affects diamond desirability just like the other quality criteria. Having a diamond that’s certified by one of the internationally-recognised organisations will result in a higher price, regardless of the carats and the other characteristics. GIA ,IGI and HRD certified diamonds tend to be among the most expensive varieties out there.


So, using these criteria, let’s take a look at a few loose diamond price examples from our website. These will illustrate just how much of an impact the different criteria can have. A 1.01 carat round diamond characterised by an excellent cut is (at the time we wrote this article) set at 5,484 euro. In comparison, a pair-shaped diamond that comes with similar characteristics is currently being offered at 4,581.49 euro.

When it comes to colour, a one carat round diamond that comes with excellent cut and D colour rating (plus GIA certification) currently sells at 8,586 euro. In comparison, a stone that’s similar in all other characteristics but has an H colour rating retails right now at 5,484 euro.

As you can see clearly from the demonstration, there are dozens of diamond characteristic combos and each one of those will result in a slight price variation. This is why you need to have a good idea about the criteria that contribute to a high diamond price and assess those prior to making your buying decision.


How do Loose Diamond Values Compare to Those of Diamond Jewellery?

When it comes to buying diamonds, you have two options – loose diamonds or jewellery like diamond rings and earrings. For many people, loose diamonds are the option of preference because of the cost-efficiency that they bring to the table.

The price of loose diamonds tends to be much more stable. Loose diamond prices are calculated without a jeweller or another middle man to affect the process. Thus, the surplus charge isn’t as high. When jewellery is being made, craftsmanship and the cost of precious metals have to be taken in consideration on top of the diamond.

Going back to the earlier example, while a one-carat diamond can cost about 3,000 US dollars, a one carat diamond engagement ring with a band made of 14K gold can start at about 5,000 dollars. Obviously, there are exceptions and it’s difficult to come up with an average, this figure speaks a lot. The more reputable a jewellery maker is, the more you’ll have to spend on a one carat diamond engagement ring. In that instance, you’ll be paying for the craftsmanship and the characteristics that the brand stands for. All of these will be added on top of the base price you’ll have to pay for the one carat diamond.

One more thing to keep in mind is that loose diamonds will often be available at wholesale prices, especially if you’re looking to buy a bigger number. Thus, there could be additional possibilities to bring down the budget.

 If you’re looking for the best loose diamond buying opportunity, you may want to consider the following one. By filling out the form, you’ll give us a better idea about the important factors to consider when buying a stone. When you complete the form, you’ll be provided with a custom quote that will correspond to your preferences and give you our best offer .


Resources You can Use to Learn More about the Price of Loose Diamonds


The good news is that you can access additional resources to learn more about how diamond prices are fluctuating. These resources are particularly beneficial for investors and for people who want to use the diamond purchase to eventually make money in the long run.


The International Diamond Exchange is a pretty useful resource for diamond buyers. For a start, it features a database of over 700,000 diamonds from global diamond centres. In addition, there’s a diamond index and a price calculator that will give you an adequate number for the specific moment. According to IDEX, the price of a one carat round diamond (G, VS2) is set at 7,800 dollars per carat as of mid-May 2017. The price of a similar diamond in the 2 to 2.99 carat range is 15,000 dollars per carat (30,000 dollars for a two-carat diamond).


You can also check out the Rapaport diamond weekly report. This is a market comment that tells diamond investors and buyers about the latest developments that could potentially have an impact on the price of loose diamonds. Some of the information is available for free while other content and reports are considered premium.


Additionally, you can find many other diamond price calculators online. You will be asked to input information about your preferences in terms of shape, clarity and carat. Based on those, you will be given with a price range suggestion. Some of these calculators, however, are branded. As a result, they’ll refer you to the price range of a specific retailer rather than to impartial information.


The Final Verdict: Diamond Valuation isn’t an Easy Task


Based on this information, you probably have already reached the conclusion that diamond valuation isn’t an easy task. Carat measurements matter but so do many other features. Market forces are also at play, especially when it comes to rare diamonds that are in high demand. In contrast, the highly popular one carat diamonds tend to benefit from a much higher price stability.

Whether you’re interested in loose diamonds as an investment or getting stones for the creation of custom jewellery, identifying the right price to quality ratio will be of paramount importance. Obviously, the task isn’t easy to accomplish because of the multiple criteria that may potentially balance out each other or contribute to a sharp increase in the price of the respective stone.

Getting a good deal on loose diamonds is all about being informed. Hopefully, the resources provided in this guide will make it much easier for you to identify stones on the market that are worth buying.

For a start, determine what carat range you’re going to choose. This is the one single factor that will have the biggest impact on budget determination. Compared to all other factors, the carat weight is the primary one in terms of loose diamond purchase. This is so because the price of jewellery craftsmanship and precious metals is excluded from the equation.

Next, you’ll have to think about the shape because this is the second most prominent factor. A round diamond is a classic but it tends to be much costlier than the other popular shapes. If you’re trying to buy under budgetary restrictions, you may want to consider alternatives. Finally, the colour of the diamond will have to be assessed. Remember that the clearer a stone is, the more expensive it’s going to be.

We have one final recommendation for you. Though certification can contribute to a higher price, it will give you peace of mind that the stone you’ve bought is genuine. Thus, don’t hesitate to spend a bit more on GIA certification. It will offer you protection and maintain the value of the diamond in the long run.

You can get a lot of additional information by exploring our diamond range and the manner in which the different criteria have an impact on the price. Also, don’t hesitate to contact us for a custom quote. We’re confident in our ability to offer precisely what you’re looking for.