Valuing Diamonds: Everything You Need to Know About Diamond Price
If you’re in the market for a diamond engagement ring, chances are you have a set budget. And your aim is to find the best diamond on that budget.
In this article, we show you how to get the most bling for your buck when it comes to buying a diamond ring. We explain all the factors that influence a diamond’s price, including which ones you need to focus on and which ones you don’t.
How Much is a Diamond Worth?
Diamonds are priced per carat. You can find a diamond price chart showing current diamond prices from any reputable diamond website. You will find that the price range for diamonds varies dramatically, even among diamonds of the same carat size.
For example, at the time of writing, the price per carat for a 0.5-carat diamond started at $1,000 and climbed all the way up to $8,000. These amounts doubled for a 1-carat diamond, with the price per carat ranging between $2,000 and $16,000.
Note that the above prices are for round diamonds only. Other diamond shapes can cost almost 50% less than round diamonds.
We would also like to point out that there is no standard diamond price calculator. Many jewelry websites offer a free diamond price calculator, but these rarely give accurate results. We will cover all the factors that influence a diamond’s price and provide you with expert tips to ensure you get the best value for money. So, by the end of this guide, you’ll know exactly what to look for when shopping for a diamond ring.
Diamond Buyer’s Basics
Before we reveal all the industry secrets to diamond prices, there are several things you need to be aware of:
All diamonds are priced according to their color, clarity, carat weight, and cut. Together, these make up the 4Cs of diamond appraisal. The closer a diamond is to being colorless and flawless, the higher the price.
Where To Buy
Jeweler markup has a significant impact on diamond pricing. The easiest way to avoid paying high markup prices is to shop online. This is because diamonds from online retailers are often cheaper than those from big-name jewelry stores. Online jewelers can offer lower prices because they have fewer overhead costs. They also tend to have more options.
The easiest way to know whether you are getting what you paid for is by buying a certified diamond from a reputable lab. We recommend getting a diamond that’s certified by the American Gem Association (AGS) or Gemological Institute of America (GIA) since these labs have the highest grading standards.
How are Diamond Prices Calculated?
Diamond prices are calculated per carat. This means that a diamond’s price increases as the carat weight goes up. This is because gem-quality diamonds in large sizes are rare.
To illustrate, the price of a round 0.25-carat diamond starts at around $300. But the price of a round 1-carat diamond starts at $3,000 or more. To get the most value for money, we recommend choosing a stone just below the half or whole-carat weights. In other words, opt for a 0.9-carat diamond instead of a 1-carat diamond.
How to Calculate Price per Carat
The formula for calculating diamond cost using price per carat is:
Carat Weight x Price per Carat = Total Diamond Cost
This is how it works:
- If a 2-carat diamond costs $9,700 per carat, the total diamond price would be $19,400 (2 x 9,700 = $19,400)
- If a o.9-carat diamond costs $5,500 per carat, the total diamond price would be $4,950 (0.9 x 5,500 = $4,950)
How to Use Price per Carat to Get The Best Value
Say you’re choosing between two diamonds that are identical in clarity, cut, and color. They also appear similar in size.
- The first diamond is 0.82 carats and costs $4,800. The price per carat is $5,853 (4,800 / 0.82 = $5,853).
- The second diamond is 0.88 carats and costs $5,000. The price per carat is $5,682 (5,000 / 0.88 = $5,682).
Although the first diamond costs less, you will end up paying more for it per carat. So, in this case, the second stone is actually better value for money.
Note that this method only works when you compare diamonds with the same characteristics. You also need to compare their visual appearance. That is, whether you can see any haziness, imperfections, or hints of color when looking at them side by side.
Frequently Asked Questions About Diamond Price Per Carat
How much is a 1-carat diamond worth?
The majority of engagement rings feature a 1-carat diamond for a center stone. So, how much can you expect to pay for a diamond of this size?
As mentioned above, round diamonds tend to command premium prices. A round 1-carat diamond engagement ring will set you back between $2,000 and $25,000. Comparatively, a princess-cut diamond with the same carat weight will cost between $2,000 and $10,000, while a cushion cut will cost between $1,700 to $17,000.
Also, bear in mind that the diamond price range for a 1-carat, round-cut stone will vary depending on the color and clarity grades. For the best value, we recommend paying around $4,500 to $6,000 for a 1-carat diamond engagement ring with an ideal cut, H color grade, and VS2 clarity. This will get you an eye-clean diamond that appears colorless.
How much is a 2-carat diamond worth?
You can expect to pay anything from $7,000 to $60,000 for a 2-carat diamond. The price is determined by factors like diamond shape, color, clarity, and cut. For the best value, we recommend choosing a 2-carat stone that costs between $16,000 and $21,000.
Also, keep in mind that you can pay up to 40% less for diamonds with fancy shapes.
How much is a 3-carat diamond worth?
A 3-carat diamond can cost you anything between $20,000 and $200,000 depending on the color and clarity grade. For the best value, we recommend buying a 3-carat diamond with color H and clarity VS2. This will cost you around $35,000 to $50,000, depending on the cut.
Wholesale Diamond Prices
Diamond dealers use what is known as the Rapaport to establish their diamond prices. The Rapaport is a price list that’s used as a baseline for international diamond pricing. It’s issued every Friday and reflects the current value of loose diamonds.
However, it’s not intended to be a definitive diamond price chart. Instead, the Rapaport serves as an approximate guideline for diamond dealers to determine their own pricing. It’s also used to monitor changes in diamond pricing.
In the past, this report was only accessible to those in the diamond industry. But nowadays anyone can buy the current report on the Rapaport website.
You can also find other similar reports, such as:
- IDEX (International Diamond Exchange): The diamond prices listed here are higher than the Rapaport’s.As a result, diamond retailers who use the IDEX report often apply a discount to their prices.
- RapNet: This is a branch of the Rapaport’s Diamond Trading network. The diamond prices listed on RapNet are the actual average selling price. This report is only available to dealers and jewelers.
The Problem with Diamond Industry Price Charts
Although the Rapaport makes diamond pricing seem simple, it is not without its flaws:
- The asking price is high. Actual diamond prices tend to be lower because retailers will apply a discount to the prices listed on the Rapaport. Some jewelers will even display the Rapaport pricing alongside their own to fool customers into thinking they are getting a ‘good deal’.
- It isn’t mindful of cut. The Rapaport’s prices are only based on color, clarity, and carat weight. But cut is another influencer of diamond quality and there can be an enormous price difference between the various cut grades.
- Diamonds of the same grade do not all look the same. For example, not all D-colored diamonds will be clear and beautiful, and not all diamonds with a VS clarity grade are eye-clean. Of course, diamonds with the best visual appearance command the highest prices.
So, instead of using a diamond price chart as a guide when shopping for loose diamonds or diamond jewelry, learn about the factors that influence diamond prices. This article is a good place to start.
Do Diamond Prices Go Up Over Time?
Most people think that buying a diamond is a good investment, but you’ll be surprised to learn that this isn’t the case.
While it’s true that diamond retail prices will increase over time (due to inflation), the same cannot be said for diamond resale value. In other words, the diamond resale market is weak.
This means that you will never be able to sell a diamond for the same price that you bought it. In fact, its value began to go down the moment you purchased it. Thus, you shouldn’t bank on making a return by choosing to invest in a diamond.
However, there are some exceptions to the rule as certain kinds of diamonds will hold their value. These include natural fancy-colored diamonds and large, flawless white diamonds. The reason why these diamonds appreciate over time is due to their rarity.
Tips For Getting Lower Diamond Prices
As mentioned elsewhere, diamonds are evaluated according to the 4Cs: cut, color, clarity, and carat weight. These are used to assess the overall quality and establish the price of each stone. But it’s important to note that not all Cs were created equal. Some Cs are less important than others, yet have a huge impact on price.
Below, we provide a breakdown of how each C influences diamond price, as well as which to prioritize and which to skimp on.
Carat Weight: The Most Important C?
Carat is a unit for measuring the weight of a diamond. One carat roughly equates to 0.2 grams. The heavier the carat weight, the bigger the diamond. Most folks prioritize carat because it is the most visible of the 4Cs, but it isn’t necessarily the most important.
Carat also has the biggest influence on diamond prices. The heavier the diamond, the higher the price. This is because finding enough rough material for cutting diamonds one carat and over is rare in nature.
If you want to get the best value, choose a diamond that’s just under those sought-after half-carat and whole-carat marks. These are where the biggest price jumps occur. For example, a 0.9-carat diamond will be much cheaper than a 1-carat diamond. It’s also highly unlikely that anyone will notice the difference, so it’s worth the extra money in your pocket.
Diamond Clarity: Not As Important As You Think
A diamond’s clarity grade describes how many flaws or imperfections it has. These can be internal (called ‘inclusions’) or external (called blemishes). Many factors determine a diamond’s clarity grade, including the size, number, and location of the inclusions. The only thing you need to focus on is whether these flaws are visible to the naked eye.
The truth is, most diamonds have flaws. But the majority can only be seen when the diamond is being examined under 10x magnification. So, all you need to do is find a diamond that is ‘eye-clean’. This means that the flaws are small enough not to be seen with the unaided eye. You don’t need a high-clarity diamond for it to be eye-clean. Also, remember that, in reality, nobody is going to inspect your engagement ring that closely.
For the best value, we recommend shopping for a diamond in the VS or SI clarity grades. These stones tend to have noticeable flaws under magnification but most can’t be seen with the naked eye. If your budget is really limited, it’s also possible to find an eye-clean diamond in the I1 range.
Diamond Color: Is It Important?
Like clarity, a diamond’s color is not as important as you might think. Sure, it can impact the beauty of your engagement ring as a whole, but it’s also not the C you want to spend the most money on. We’ll explain why in a moment.
Color describes the yellowish tint that colorless diamonds can exhibit. The color ranges from D (colorless) to Z (visible yellow/brown tint), but most diamond retailers don’t stock anything below a K for engagement rings.
Most diamonds have a light yellow tinge, but it often goes unnoticed by the naked eye. It’s also almost impossible to tell colorless and near-colorless diamonds apart. In other words, there’s really no point in spending money on something you can’t see.
We, therefore, recommend an H color grade as the best value for money. It’s in the near-colorless category, so the price is lower, and any hint of yellow will go unnoticed by most people.
Also, keep in mind the color of your setting metal as this can have a significant impact on the appearance of your diamond. A white metal like platinum or white gold, for example, can make a yellow tint appear more noticeable. But warmer-toned metals like yellow gold and rose gold are better at concealing it. This means that you can opt for an even lower color grade, like a J or a K color diamond, if you’re looking to save money.
Not sure whether the diamond you’re looking at in the store will appear colorless in an engagement ring?
Here’s a pro tip: Fold a piece of pure white paper in half and put the diamond in the crease. Next, examine it away from any bright lights. If you see any sign of yellow, the diamond will have a yellow tinge in a platinum or white gold setting. A diamond like this is most likely a J or K and is better suited for a yellow or rose gold setting.
Diamond Cut: Why It’s The Most Important C
This is the one C that you should never skimp on. Diamond cut is the most important factor to take into account when choosing a stone. So much so, that this is where you should spend most of your budget.
Why is this?
Well, cut is what gives a diamond its famous sparkle. Plus, it can hide any imperfections that a particular diamond might have. This means you can afford to compromise on some of the other aspects of a diamond – and save money!
A sparkly diamond will also appear larger as long as the cut quality is good. Conversely, a poorly-cut diamond will look smaller and duller (and you don’t want to overpay for a diamond that looks smaller than it really is!).
Note that cut refers to symmetry, proportion, and polish – not shape (see the next section for more on shape). A rough diamond has no sparkle. Polished diamonds shine thanks to how they are cut and the way light reflects off each angle and facet.
So, how does the pricing differ for cut? Diamond prices spike quite a bit to the Excellent (EX) cut, but this is where spending that extra money is worth it since the difference in quality is clearly visible.
Diamond Shape: Why It Matters
Most people are familiar with the most traditional diamond shape – the round brilliant. Diamonds cut in a round brilliant shape are the most expensive, and their popularity is due to their incredible sparkle.
However, alternative diamond shapes are just as beautiful and are also much cheaper. Here is a brief overview of the different diamond shapes that are available for engagement rings:
- Square/rectangular diamond shapes include the princess cut, radiant cut, and cushion cut. The princess cut will appeal to those looking for a contemporary alternative to the round brilliant. But the radiant and cushion cuts are a great option for those who like the princess cut but want something a little less mainstream.
- Oval diamonds are an excellent choice for those who appreciate tradition but want to express their individuality. This diamond shape puts an elegant, modern twist on the classic round.
- Step cuts, such as emerald and Asscher, are often seen in diamond engagement rings from the Art Deco period. These will appeal to those looking for a vintage style.
- Other fancy cuts, like pear and marquise, are for those who wish to stand out from the crowd. Diamonds cut in these shapes also tend to appear larger than round diamonds of the same carat size.
Price-wise, you can save up to 40% on a diamond with an alternative shape. You can then put the extra money towards a more extravagant setting or a better/larger stone.
The Fifth C: Diamond Certification
If you want to make sure that you’re getting what you paid for, we recommend buying a diamond that’s been certified. Diamond certification is carried out by diamond grading labs like the GIA and AGS. These two labs are highly respected across the globe and have the highest grading standards.
Although this means that you can expect to pay more for AGS and GIA-certified diamonds, it is something that you should not compromise on.
In fact, diamond certification by a reputable lab is so important that it’s often regarded as the ‘fifth C’.
Diamond Fluorescence: It’s Not As Bad As You Think
Before we wrap up this section on how the 4Cs influence diamond prices, there is one final aspect you need to be aware of – diamond fluorescence.
Fluorescence refers to the soft blue glow that some diamonds exhibit under ultraviolet light. It is due to the presence of certain minerals in the stone. This effect is completely natural, occurring in about one-third of all diamonds.
Although it doesn’t have any detrimental effects on a diamond’s appearance, fluorescence is generally regarded as an undesirable characteristic. The good news is, a diamond with fluorescence may be sold for 2% to 15% less than a diamond without.
Additionally, in diamonds graded I and lower, the blue can actually counteract the yellow tinge, often improving the face-up color of a diamond by a whole grade. This means you can get away with buying a cheaper diamond in a lower color grade and it will still appear colorless.
Natural vs. Lab-Created Diamonds
So far, we have only focused on the pricing for naturally-mined diamonds. But we would briefly like to mention lab-grown diamonds (also known as synthetic diamonds) as there is a huge price difference between the two.
Lab-created diamonds are real diamonds. They even share the same carbon structure as a natural diamond. The only real difference is that they were grown in a controlled environment.
Because they can be mass-produced, synthetic diamonds can be up to 80% cheaper than natural diamonds. They are also more eco-friendly to make, making them a popular choice among environmentally-conscious individuals.
Other Factors that Influence How Diamonds Are Priced
Besides diamond quality, there are a few other factors that can affect diamond pricing:
- Retail markups: These have a significant impact on diamond prices. Naturally, you will find that big-name brands like Harry Winston and Tiffany have high markups. But popular jewelry stores in malls can have high premiums as well. Brick-and-mortar stores have high overhead costs that are also factored into a diamond’s price. But online diamond retailers like Blue Nile have lower overheads, so the cost of buying a diamond from one of these stores is often cheaper.
- Jeweler policies: Many jewelers offer free resizing, lifetime warranties, and 100% buy-backs when you buy a loose diamond or diamond jewelry. But bear in mind that these generous policies are often included in the selling price of a diamond.
The Bottom Line
In conclusion, here’s a short recap of everything we have discussed in this diamond price guide:
- Diamonds priced just under the 1-carat or half-carat marks cost less.
- The VS1 and VS2 clarity grades offer the best value for money because they are generally considered eye-clean.
- An H color diamond is ideal for a platinum or white gold ring setting.
- Yellow and rose gold settings can save you more money since they can conceal the slight yellow tint of a diamond in a lower color grade.
- A diamond’s color and clarity grades do not affect its brilliance as much as its cut quality. Thus, put whatever money you can into cut.
- Round diamonds have the most sparkle but they also cost the most. Consider an alternative shape for a more unique, yet affordable engagement ring.
- A diamond’s fluorescence can work in your favor. A diamond in a lower color grade with a medium-strong fluorescence will be significantly cheaper and appear whiter at the same time.
- Buy a diamond with a grading report from the AGS or GIA for the best guarantee of quality.
- Online diamond retailers offer lower prices than brick-and-mortar stores.
We hope that you have found this guide to diamond prices insightful and that it will help you to find the engagement ring of your dreams.
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