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True Colors Shining Through

True Colors Shining Through

Color is probably one of the most elusive and captivating characteristics of a diamond. Color is graded from D to Z – from colorless to brown or light yellow. The closer a diamond's color is to D, the more colorless it is and the higher its value. Diamonds of different colors will differ dramatically in value.

Color is a difficult characteristic to determine, with surrounding light, color of clothing, time of day and even coffee consumption influencing color perception. Therefore, to keep color-grading as consistent and unbiased as possible, labs use specialized machines to measure and determine color.

Pink, blue or other colorful diamonds – referred to as Fancy Color diamonds – are graded on a different, seven-step scale that indicates the depth of color in the diamond. 

While this article discusses white diamonds, Fancy color, which is a unique sub-set characteristic with a dramatically different value proposition, will be discussed in a separate article.

The non-fancy color diamonds, commonly referred to as White diamonds, come in many hues, although most of them have a yellowish tint. Each letter of the 23-step from D to Z scale, stands for a specific color range for a combination of tone (lightness or darkness) and saturation (intensity), creating a value called “depth of color.” 

Many people wonder why the color scale starts at D and not A. In the past, grading systems broadly divided diamonds into three-color categories - A, B and C. The current and more specific scale starts at D to create a differentiation from older grading systems.

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Polished Diamond

Groups of Color

The first three-color grades - D, E and F - are referred to as colorless. The first and sharpest change in value is between D and E. The G-J color range is known as Near Colorless. They have very small traces of color in them, and only a side-by-side comparison with colorless diamonds will make the color stand out. Under such a comparison, a G-color diamond may still seem colorless and a J-color diamond will exhibit a very faint yellowish tint. 

Diamonds graded K-M are faint yellow. Here the yellow tint is more pronounce, although coloration is still difficult to see by the untrained eye. The value of these diamonds is lower. N-R graded diamonds are in the Very Light Yellow group. The last color group is S through Z. These diamonds have a distinctly yellow or brown color. The color, however, is not strong enough to be considered a fancy color diamond.

 

The Value of Non-Color

The closer a diamond's color is to D, the higher is its value. The declining value primarily reflects the increasing rate of recurrence of lower color diamonds in nature and greater prevalence in the market. As mentioned before, rarity is an important aspect of the value of diamonds

As part of the Crystal Clear philosophy, it should be clarified how color impacts value. Just like with size, cut and clarity value changes along the grading scale, but unlike the sharp drops seen between ranges shown in our past articles, with color the value decline takes a different form.

The difference in value between a D and an E color diamond is very dramatic and can range from 10% to 40% for If clarity round diamonds. Because the intention here is to explore the idea of value change, we will focus here on round shape, IF clarity, one carat triple excellent diamonds. The value differences will be somewhat different with other cut, clarity, carat combinations, but the principle holds true throughout.

For a 1-carat, round, IF, triple excellent diamonds, the value drop from D to E is 33%, based on an analysis of current market prices. The decline in value between E and F is 11%, a smaller decline. This trend is seen through the color scale - it starts with a strong decline and then the value drop slowly shrinks, as the following table shows.

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From the top value D color, there is a steady value decrease that starts as a sharp decline that slowly tapers off as color becomes very low. In other words, in higher colors, color is an important component of value, but in lower colors, the impact of color on value decreases. 

 

Combining Color with other Value Characteristics

Once again, this value hierarchy does not live in disconnect from other value components. The following table compares change in value by color and size – 1 carat versus 0.98 carat, where the price jump is significant.

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As you can see, based on current market prices, weight has a stronger impact on value than color. At the same time, the trend in value change remains the same: a sharp decline between the top D color and the following E color that gradually contracts as color grade declines.

The following is a further analysis of value, comparing size and color of IF clarity diamonds:

Diamond-Color-Table.png

 

Color is a special and important part of diamonds. It can have a dramatic impact on the value of a diamond, especially in the better color range. By being aware of this, a well-informed decision can be made when considering the value of a diamond, especially if considering a diamond as part of a wealth preservation belief where transparency is indispensable.

 

The views expressed here are solely those of the author in his private capacity. No One should act upon any opinion or information in this website without consulting a professional qualified advisor.

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