Diamonds have captivated the imaginations of both women and men for centuries. But there is a marked difference between the intricacies of what diamond traders know about diamond prices and what consumers know about them.

Diamond pricing

Diamond experts who trade diamonds round the globe daily in the wholesale markets use a set of criteria which has been defined by independent gem laboratories in order to set the price of the diamonds they buy and sell. Without an evaluation of these essential characteristics which determine each diamond’s value, a trade cannot take place.

Professional traders begin by considering the well-known 4Cs before anything else, often before even setting their eyes on the diamond itself. These 4Cs are Carat, Colour, Clarity and Cut. But there is a 5th C which very few people know about. Ehud Arye Laniado was a consummate expert on the measure he calls the 5th C – Comments and other irregularities.

After rigorous examination at a gemological laboratory, each diamond is issued with its own certificate. A diamond certificate lists a diamond’s 4Cs and other crucial information, all of which influence its price. Consumers often overlook the additional information, mostly listed under a section called Comments. But amongst traders it is of enormous importance. Certificates highlight characteristics such as flourescence and the precise position of minute flaws. Quite often, two diamonds with the same 4Cs can differ largely in price due to a host of other factors.

When combined, the 4Cs, the Comments section and further criteria called Irregularities – as explained below - create the basis for systematically valuing diamonds.



Diamonds are weighed in carats. One carat is equivalent to 0.2 grams. The price of a diamond is often quoted per carat. The price usually jumps dramatically at round carats.

For example, the per carat price of a diamond weighing 1 carat is much higher than a diamond weighing 0.99 carats, even if all other price parameters are equal.

Because of this, the price difference between a 1-carat diamond and a 0.99-carat diamond is considerably greater than the difference between 0.99 carats and 0.98 carats.



Diamond colour is graded from D to Z – from colourless to brown or yellow. The closer a diamond's colour is to D, the higher the price. The surrounding light, colour of clothing, time of day and even coffee consumption can all influence colour perception. Diamond laboratories use specialised machines to measure and determine colour.

Pink, blue or other colourful diamonds, referred to as fancy colour diamonds, are graded on a separate seven-step colour scale, from Faint to Vivid. Fancy colour diamonds sometimes have a main and a secondary colour, for example, a purplish-pink diamond. While such diamonds may still command good prices, diamonds with a single colour are usually priced higher.



Clarity is the measure of inclusions and blemishes in a diamond. Absence of these is rare and reflected in the price. Diamond clarity is graded on an 11 step scale, ranging from Flawless to diamonds with obvious Inclusions. Diamond prices usually jump dramatically at certain clarity thresholds – between the FL (flawless) or IF (Internally flawless) and VVSs (very very small inclusions), between VVSs and >VSs (very small inclusions) and between SIs (small inclusions) and Is (inclusions). While some inclusions are visible to the naked eye, others can only be seen under magnification. The standard magnification of diamonds is times 10.

Gem laboratories award a clarity grade to a diamond based on the size, nature, position, colour and quantity of clarity characteristics. But even within one clarity grade, prices of diamonds can vary. A black inclusion near the top surface, or table, of a diamond reduces the price more radically than a white inclusion hidden at the bottom of a stone.

Cut Grade and Shape


Cut usually refers to a diamond’s shape – whether a diamond is round, square or a fancy shape such as a pear, marquise or heart. When more of a diamond is lost during the polishing process, for example in the case of a round versus a square shape, the price of the diamond is higher.

Cut also refers to the Cut Grade which measures the proportions of round diamonds and how much light reflects from the diamond, thanks to the precision and artistry of the cut. Superior diamonds reflect more light.

There are five Cut grades from Excellent to Poor. Light is the toughest characteristic to measure and analyse, and is evaluated with the help of scientific tools for Brilliance (the total light reflected from a diamond), Fire (the dispersion of light resulting in a rainbow of colours) and Scintillation (the flashes of light, or sparkle, when a diamond moves).

Cut Grade also evaluates the Finish, which is the workmanship that goes into shaping a diamond into its final polished form, measured in terms of Polish and Symmetry. This includes how visibly the lines from the polishing process appear on the diamond and the precision of a diamond’s facets, for example a missing or misshapen facet.

Comments and Other Irregularities


A list of hundreds of possible comments and irregularities, found on a diamond certificate, are crucial to determining the price of a diamond. Laniado has developed a proprietary list of more than 400 of them.

Some minor comments do not impact the price of a diamond. But others do - for example, internal graining which refers to thick white or brownish lines on the stone, or a cloud, which is a cluster of small inclusions invisible to the naked eye that combines to create a cloud effect. Or the fluorescence or finish of the stone.

The Comments section can describe a cloud as small, large or hazy. While a small cloud hardly blocks any light and may not impact the price, a large cloud could result in reducing the brilliance of the stone and also the price.

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