Diamond pricing is a complex subject that is not easily understood by consumers. Many factors influence the price of a diamond, including carat weight, color, clarity, and cut (also known as the Four Cs). To learn more about these factors, visit here.

Rough diamond prices are influenced by supply and demand as well as by political events in key markets. These factors can fluctuate greatly and are often unpredictable. This can create significant price volatility that makes it difficult to determine a fair market price for rough diamonds.

Once a diamond is polished, the wholesale price can be determined through a number of different methods. One of the most popular methods is through a weekly publication called “The Rap List.” When this guide is published, it affects all diamond dealers globally. The information in the rap list is supposedly based on research of actual asking prices at the wholesale level but it is also often manipulated by sellers and buyers who have their own agendas to drive prices up or down.

When a diamond is purchased by a retail jeweler, it typically goes through another set of valuations and appraisals before it is offered to the consumer. This process includes a full disclosure of the diamonds’ grades, clarity and color along with any significant flaws that could impact value. The jeweler is also able to add on additional markup to compensate for operational costs such as property, labor, advertising, security and insurance.

While this is a critical process that should be followed, it can create confusion for the consumer who is trying to find the best deal. This is why choosing the right vendor should be a top priority for any shopper. It is a good idea to look for a reputable lab that provides reports with high accuracy.

In addition to the 4 Cs, other important factors that influence value include:

The cut of a diamond is also very influential in how desirable it will be to the consumer and can drive significant price variations. Similarly, the uniqueness and trendiness of color in a diamond can be very attractive to the end user and significantly increase value.

Clarity is also a critical factor that can have dramatic price variances. Two diamonds with the same clarity grade may be priced very differently based on factors that are not apparent to the naked eye such as how they are positioned in the facet patterns or location at the girdle.

With the advent of laboratory grown diamonds, pricing can be even more confusing. It is a new market that is highly volatile and the technology is constantly evolving which can make it very difficult to compare apples to apples. Moreover, the tangled jumble of producers and their diverse manufacturing techniques have created significant quality/value issues that do not always show up on lab reports making comparisons even harder.