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Diamond Evolution: Why the 4Cs is no longer an adequate pricing system

By Renée Newman

Superbly cut marquise with brillance all across the stone. D-colour, IF, 4.17-carat diamond from Sarosi by Timeless Gems.<br /> <span style="font-size: 10pt; font-family: arial, helvetica, sans-serif;"><i>Photo ©Diamond Graphics</i></span>
Superbly cut marquise with brillance all across the stone. D-colour, IF, 4.17-carat diamond from Sarosi by Timeless Gems.
Photo ©Diamond Graphics

Using the 4Cs (colour, clarity, cut, and carat weight) to explain diamond pricing was developed by the Gemological Institute of America (GIA) in the 1950s. At that time, cloudy diamonds were considered ‘industrial-grade’ stones and were not set in jewellery. As such, transparency was not a concern, nor was treatment status, as almost all diamonds were untreated. Likewise, there were no separate price lists for rounds or other shapes—therefore, it didn’t matter that ‘cut’ was used interchangeably to refer to both the shape of the stone and the quality of the cut. Further, the only lab-grown diamonds that were available were tiny stones, which were used as industrial abrasives.

Times have changed. These days, cloudy and hazy diamonds are often used in jewellery, but their clarity grade on lab reports does not necessarily reflect their lower transparency and value. It’s also become much more common for diamonds to be treated to improve their colour and apparent clarity grades—and the price difference between treated and untreated diamonds can be significant. Additionally, cutting style and shape are distinct price factors from cut quality and many gem labs now issue diamond reports with cut grades. High-quality lab-grown diamonds have become widely available and sell for much less than mined, natural diamonds. When all of these listed factors are considered, it becomes very clear the 4Cs is no longer an adequate pricing system.

Diamond buyers should be aware of the following eight basic price factors:

  • Colour
  • Carat weight
  • Cut quality (i.e. proportions, finish, and light performance)
  • Cutting style and stone shape
  • Clarity (i.e. degree to which a stone is free from inclusions and blemishes)
  • Creator (i.e. natural or lab-grown)
  • Transparency (i.e. degree to which a stone is clear, hazy, or cloudy)
  • Treatment status (i.e. treated or untreated and type of treatment)

These eight price factors are explained below. To remember what they are, simply refer to them as the 6Cs and 2Ts.

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Price factors explained

Round diamond with excellent brilliance, fire and symmetry. Photo© Michael Cowing, ACA Gem Lab
Round diamond with excellent brilliance, fire and symmetry.
Photo© Michael Cowing, ACA Gem Lab


When it comes to diamonds, the less colour there is, the higher the price of the stone (with the exception of fancy colours). D is the highest and most rare colourless grade, while S to Z are the lowest colour grades and result in a stone that is light yellow. As the grades descend toward Z, the amount of colour present increases; in turn, the price of the diamond decreases.

Each letter on the grading scale represents a narrow colour range; not a specific point. In its diamond grading course, the GIA states each of its masterstones “marks the highest point—or least amount of colour—in that range. A diamond with slightly less colour than the H masterstone is considered G-colour, and so on.” A GIA G-H split-grade masterstone represents the middle of the G grade. It doesn’t have as much colour as an H, but has more colour than a straight G grade.

Brown and grey diamonds are graded on the same scale, but with some modifications. GIA graders describe brown diamonds darker than K with the letter grade and an accompanying coloured diamond grade (e.g. ‘faint brown’ for K to M, ‘very light brown’ for N to R, and ‘light brown’ for S to Z). Thus, an L-grade brown diamond would be graded as ‘L-faint brown.’ The GIA does this to distinguish brown stones darker than K in the normal range from yellow stones in that range. Light brown diamonds typically sell for less than light yellow diamonds.

The GIA grades grey diamonds with more colour than the J masterstone using their fancy-colour system. As such, a K-colour grey diamond would be graded simply as ‘faint grey’ without a letter grade. For more information please read GIA Diamonds & Diamond Grading Course and Diamond Grading Lab Manual (2006).

Diamonds with a natural body colour other than light yellow, light brown, or light grey are called ‘fancy colour diamonds.’ These stones often cost significantly more than those that are colourless. For example, a 1-carat natural pink diamond could sell for five to 15 times more than a D-colour diamond of the same size and quality.

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Fancy colour diamonds are graded with the stone in the face-up position, as the cut can influence the apparent colour. Likewise, the price of these stones is based on the face-up colour—the more intense the colour, the higher the price.

Marquise with a non-brilliant dark central area. <br /> <span style="font-size: 10pt; font-family: arial, helvetica, sans-serif;"><i>Photos© Renée Newman</i></span>
Marquise with a non-brilliant dark central area.
Photos© Renée Newman

Carat weight

In most cases, the higher the carat weight category, the greater the per-carat price of the diamond. A carat is a unit of weight equaling 0.2 grams. The weight of small diamonds is frequently expressed in points, with one point equaling 0.01 carat. In diamond districts, you may also hear the term ‘grainer.’ This word is used to describe the weights of diamond in multiples of 0.25 carat (or one grain). Therefore, a ‘four grainer’ is a 1-carat diamond.

If a diamond is advertised as having a weight of 0.25 points, this can be misread as it being 0.25 carats in weight; in actuality, 0.25 points is equal to 0.0025 carats. It is important for your customers to understand the correct weight of the diamonds in the jewellery you sell, or you could be accused of misleading them.

Cut quality

Cut quality (or ‘make’) refers to the proportions and finish of a stone. This is a crucial factor, and can affect a diamond’s price by as much as 50 per cent.

Two of the main considerations of cut are:

  1. Do you see brilliance all across the stone when you look at the diamond face up? Diamond brilliance should not be interrupted by large dark areas.
  2. Are you paying for excess weight?

The cut of a stone should be judged with an unaided eye and a 10x magnifier. Look at both the face-up and profile view of the diamond.

Cutting style and stone shape

In today’s market, round diamonds cost more than pear and marquise shapes and emerald cuts. The effect a stone’s shape has on its price varies, depending on its size, demand, and available supply. For example, there were periods in the past where marquise shapes sold for more than rounds.

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Round diamond with excess weight, which looks smallfor its weight face-up.
Round diamond with excess weight, which looks small for its weight face-up.

Likewise, square-shaped diamonds can cost as much as 15 to 30 per cent less than rounds. This is because there is less weight loss from the rough when cutting squares, and, typically, there is less of a demand for squares.

Different shapes can be cut using various faceting styles. The GIA has simplified the description of these cutting styles by limiting them to three basic types: brilliant cut, step cut, and mixed cut.

Brilliant-cut square diamonds (or ‘princess cuts’) may cost slightly more than step-cut squares, depending on size. These stones have the same shape, but different faceting styles. Patented and trademarked cutting styles typically sell for more than generic cuts of the same shape.

Cutting style has a significant impact on the price of fancy colour diamonds, as the face-up colour of these stones can be intensified by its shape and faceting style, and because the rough is so expensive. For example, a 1-carat, intense yellow round diamond can cost anywhere from 10 to 100 per cent more than a stone with the same weight and colour grade that is a radiant, brilliant-cut rectangle or square with bevelled corners (depending, of course, on the stones and the dealer selling them). This is because the rough of the round diamond must be darker than that of the radiant to achieve the same intense yellow face-up colour—cutters can’t play as much with the angles and shape of rounds to maximize their colour. In short, the stronger the colour of the rough, the higher the price; the final price of the diamond is based largely on the cost of the rough.

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