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NEW RULES IN PRICING DIAMONDS

Do you want a certified 1.00ct D SI1 brilliant cut for $7 000 or $4 000?   Your choice, buy a ‘dog’ if you wish.

To price a diamond today is everybody’s nightmare. Blame it on technology, the internet, business acumen, or whatever. In the past, the 4 Cs were enough. Not anymore.

In recent years, the internet provided diamond price lists and information how to use them, which destroyed the mystery of diamond pricing and enabled the buying public to calculate a price per carat based on the 4 Cs and compare offers on the internet with retail stores. Only the best priced certified diamonds found buyers and retailers had to lower their margins to make a sale. When diamond cutters and wholesalers started to sell online to the public, they competed directly with retailers, their traditional clients, who then refused to buy from those competing with them. The traditional supply chain – from cutting works to wholesaler to retailer – became unstuck.

The international diamond trade, to restore mystery in the pricing of diamonds and to make it difficult for the public to compare prices, thus introduced, on top of the 4Cs, new factors to influence diamond pricing.

                       NEW  PRICING  FACTORS
            Today, the 4Cs plus the following factors, determine the price of a natural diamond.

  • As before, diamonds with a grading report from a gemmological laboratory could be 10-20% more expensive than a similar stone without a proper grading report.
  • The reputation of the laboratory – Grading Reports from GIA carry a premium over those from other laboratories. Reports from EGL Tel Aviv or Mumbai are not acceptable.
  • The cut grade – whether excellent, very good, good, or fair – can influence the price up to 30 %. Factors such as the ‘weight ratio’ and’ girdle thickness’ also play a role.
  • The polish and symmetry – these features, also graded as excellent(X), very good(VG), good (G) etc. are combined with the cut grade to ‘tag’ certified diamonds as X.X.X., X.X.VG., X.VG.VG, VG.G.VG, etc. A triple X stone carries a premium.
  • The type of imperfections. Colourless inclusions are preferred to dark ones, while surface-reaching cracks may trap dirt and become visible once it is worn.
  • Ultra Violet Fluorescence –The presence of very strong, strong, moderate, or faint, UV fluorescence, coupled to the body colour of the stone, influences the price in various ways. For instance; D-F colour diamonds with very strong blue fluorescence can cost up to 25% less than a similar D-F colour with no fluorescence, while the presence of strong blue fluorescence in slightly tinted diamonds may add value as it gives the stone a whiter, brighter face-up appearance.  The colour of the UV fluorescence, whether yellow, blue or purple, may also influence the price.
  • Using fancy technology, Laboratories such as IGL and GGTL introduced factors such as ‘optical transparency’ and ‘chemical fingerprinting’ that supposedly made the traditional 4Cs less relevant.
  • Branding. In the 1990s, de Beers passed the generic marketing of diamonds to their sightholders, which resulted in Diamond Brands, such as: ‘Hearts and Arrows,” 8Hearts’,’ My Girl,’ etc., which carry a premium to cover advertising costs.
  • Diamond Origin Reports. GIA has developed technology to trace the origin of a diamond and will add such information to their grading reports, at a price, of course.

THE BUYER’S DILEMMA

Today, the public can find two natural diamonds, both certified as round brilliant / 1.00ct weight / D colour / VS1 clarity, with vastly different asking prices. Many of the ‘best priced’ diamonds available online are those with negative characteristics of which the buying public is unaware.

Please Note:  the above applies to certified natural diamonds only.   If a diamond was made in a factory (ie, of synthetic origin) even certified as such by a grading laboratory, its value should be a fraction of that of a natural diamond of similar quality.  The cheapest diamond amongst those with the same 4C’s is sold at such a low price for specific reasons – It may also be the ugliest, least saleable diamond, what the trade calls a ‘dog,’ regardless its top colour and clarity.

BE AWARE WHEN BUYING A DIAMOND
The need for expert advice is now more relevant than ever.

 

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