While the value of diamonds is entirely arbitrary, it is their global charm that puts them in high demand year after year. Diamonds have long been regarded as one of the first kinds of payment, dating back thousands of years. It is now regarded as the universal emblem of love, riches, and success in our twenty-first-century world. Because of their scarcity, diamonds are extremely expensive, especially when combined with their beauty. It is possible to find a diamond of exceptional beauty even in the lowest grades. In addition to the diamond’s colour, clarity, and size, there are several other important elements that influence the diamond’s value.
How Much Should a Diamond Be Worth in Real Life?
When compared to other precious gems such as pearls or even Jade, no two diamonds are exactly the same price. Several elements influence the value of a diamond when it comes to deciding how much it is worth. The 4Cs (Color, Clarity, Carat, and Cut) together with the form and fluorescence of the diamond are the primary factors in determining its price.
Martin Rapaport pioneered the mathematical technique to accurately evaluate diamonds, which was first used in 1978. Color, clarity, and carat weight were the first three measures he used. “Rapaport” is now regarded as the worldwide price indication for diamond dealers all over the world, according to the company. This also helps purchasers to obtain fair prices instead of being subjected to the vendors’ own opinions. With Diamonds on Call, you can get the most bang for your buck, just like you can get the finest bank for your money. With the improved grading procedure, you can rest assured that each diamond is verified on its own. With customer service available around the clock, you can always get in touch with someone regardless of what time zone you are in.
Diamond mining is quite expensive.
Diamonds are extremely uncommon. All of the gem-quality diamonds that have ever been mined could fit into a single double-decker bus in London. Numerous jewellers have never even laid eyes on a D Flawless diamond in their lives. There are just 53 locations on the planet where there are enough diamonds to support commercial mining. The last one was unearthed more than two decades ago. Mining corporations are ready to invest millions of dollars in establishing mines in very remote locations such as beneath a frozen lake in the Canadian arctic, in the middle of a desert in Botswana, or on the ocean floor off the coast of Namibia.
It is extremely expensive to run a mine in this manner since all of the personnel must be flown in and provided with housing and food. Many mines have a life expectancy of a decade or two (before it becomes too expensive to go deeper.) Around the world, there’s a huge list of mines that are no longer economically viable to operate anymore.
Financing Diamonds are more expensive because of inventory.
Miners require large sums of money in order to construct mines. Cutters require millions of dollars in raw materials in order to keep their cutting plants running. Diamonds and gold are required by jewellery producers in order to create jewellery. Additionally, stores must have inventory sitting in cases waiting for customers to purchase it (and often require the vendor to provide these goods on consignment.) Every stage of the diamond pipeline necessitates the expenditure of a significant sum of money. Furthermore, banks aren’t lined up to lend money to the diamond industry since they aren’t knowledgeable enough about diamonds to assess the collateral. Financing is a major problem in the sector, and it is growing increasingly expensive on a daily basis. Of course, this is true across all industries. However, the raw materials used in the diamond industry are more expensive than those used in any other sector. It’s the equivalent of taking out a new mortgage every week. The interest accrues over time.
Diamonds are desired by people all around the world.
Due to the fact that De Beers now only accounts for half of the global diamond production, the corporation no longer invests in consumer marketing to help stimulate demand for diamonds. An entire generation of customers has grown up without ever seeing any generic diamond advertising on television or in magazines. Despite this, individuals all around the world continue to be interested in purchasing diamonds.
While traditionally, the majority of diamonds were sold in the United States and Europe, rising markets such as China and India are rapidly expanding their presence. As these economies become more prosperous, the demand for diamonds is expected to continue to rise.
The price is determined by the grade.
The Gemological Institute of America (GIA) must now grade the diamond stockpile that was so expensively financed. The cost of a one-carat diamond increased by $120 as well as a few additional weeks of financing as a result of this. But, more crucially, the price of your diamond is determined by the grading report. Even though you spent extra on the finance, the raw, the sorting, and the cutting, you are still in competition with everyone else in the world who has a G colour, VS2 clarity, superb cut grade diamond, and you are competing with them.
The yield of diamond rough is low.
So, once you’ve moved a tonne of rock and discovered that one glittering carat of rough diamond, you’ll know you’ve made it, won’t you? Wrong. For diamond raw, the output is typically in the range of 30 per cent. A one-carat raw diamond will cut a polished stone that is one-third the size of the rough diamond.
If the rough is makeable, it will be polished into a single stone; if it is sawable, it will be sawn in half before polishing; if it is near gem or cleavage rough, it will be cleaved into two or more pieces before polishing; and if it is an industrial grade, it will be cut into tools or crushed into powder, the yield will be determined by these factors. It is possible to get as much as 70% yield from rare octahedral crystals if they are cut into two princess cuts (which is why that shape is more affordable than round brilliant diamonds.) However, the vast majority of the carats of gem-quality diamonds produced each year are reduced to dust as a result of the polishing procedure used in the cutting process.
Sorting and cutting are time-consuming tasks.
Because diamond rough is so costly and yields may be so minimal, sorting and assessing each piece of rough necessitates the employment of specialised knowledge and equipment. Each batch of dough must be thoroughly analysed by industry professionals in order to determine its potential.
The cutters must make judgments on how to get the greatest amount of value from each piece of raw material. Should you cut a huge round that will sell for more per carat but would waste more of the rough or should you cut several smaller rounds? Two smaller pears that sell for less money but require less preparation time? What will provide you with the highest return? Even in today’s world, when technologies like the Sarin allow for exact measurements and three-dimensional visualization, they are difficult computations to do.