The price of diamonds is expressed per carat, a mass unit where 1 carat is equal to 0.2 grams. You will need to divide the price of the diamonds by their respective weight in order to compare the prices of various different diamonds. Quite a complex task, as the price is dependent on several different factors. External factors, like the international diamond price and the global economy, certainly play a role too.
Which factors determine the price of a diamond?
The 4C’s are the standard for determining and comparing the price of diamonds. Professional certification by an independent laboratory is therefore of the utmost importance. The consistency in grading per lab is very important too. That’s why BAUNAT always works with the 3 most respected laboratories: GIA, IGI and HRD.
Other external factors which determine the price are the market giant De Beers’ market share and economic fluctuations. Even though the diamond price only reacts very slightly to economic fluctuations, which confirms the stone’s crisis resistance.
How is the price of a coloured diamond determined?
Natural coloured diamonds or ‘fancy coloured diamonds’ occur in all possible colours and are even rarer than their colourless counterparts. The cut and clarity are therefore a little less important. The intensity of the colour is the most important parameter for determining the price of the diamond. The price of coloured diamonds also increases exponentially in relation to the weight in carat.
As naturally coloured diamonds are even rarer, the price for these diamonds is largely determined by supply and demand, resulting in them sometimes going for astronomical amounts at auction houses.
How does the price of diamonds evolve?
The price of diamonds has remained stable for long periods of time throughout history. However, studies have predicted increasing prices for the next decades as a result of the increasing demand and declining supply. After all, various mines have now been depleted and very few new mines are being discovered.
There are a number of other options, such as reclaiming diamonds from the sea. However, this is currently still a very expensive option and this can be reflected in the price of diamonds worldwide.
How will this affect investment diamonds?
Given the expected price increase and the expected decline in supply, now’s the perfect time to buy diamonds for investment purposes. White diamonds of a minimum of 1 carat with a minimum G colour, VS2 clarity and a good cut quality are the best option. The price for these diamonds will increase during the course of the years.
The price of an excellent cut diamond (3EX) is approximately 30% higher than the price of a diamond with similar factors, but a worse cut.
How will diamond jewellery be affected?
You will also need to keep the price for precious metals in mind when looking at the price of diamond jewellery. For example, gold has experienced a significant dip during recent years. Yet the outlook is still relatively positive, even though it is still a market which is difficult to predict. It’s therefore important to buy trusted gold jewellery with diamonds, as the gold will often be mixed with other precious metals.
The current diamond jewellery market is good for around 70 billion euro, with approximately 10% of this being bought online. The online price for diamonds and diamond jewellery is, on average, around 30-50% lower than in physical shops.