RESEARCH REPORT

ON

PRICE MOVEMENT IN GLOBAL DIAMOND MARKET AND DIAMOND DRIVERS

Submitted By

Dilip Singh Pal (11605620)

Aniket Agarwal (11605951)

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA
INTRODUCTION

Diamond is the most renowned and fictional of all gemstone’s diamonds are very
unique in many ways. Famous for being the hardest metal on earth, its shining fire,
durability, and scarcity make Diamond the most sought of all gems.No Diamond
contains as much demand and interest as does Diamond.

Most of gemstones used are colorless or very faintly colored. The topic to be discussed
is price fluctuations of diamond in the global diamond market. First and foremost, the
diamond market is explored and found out to be heterogeneous hat is made of three
significant market segments. Later the process of movement of stones from mines to
global market is studied. And then the diamond drivers and some factors which might
influence diamond prices are studied.

This is also known as diamond price drivers.

INDUSTRIAL DIAMONDS

The diamond market can be divided into three wide categories namely In terms of
volume, account for 93% of newly produced diamonds, but in terms of value
industrial diamonds have about 17% of rough diamond production only. Industry
diamonds are segmented into two major market segments, Mostly the grit segment is
the reason synthetic diamonds3 have increased significantly in larger market shares.
By 21st century the synthetic diamond accounted for 77% of the grit market, whereas
today it constitutes more than 93%.

JEWELRY DIAMONDS

In terms of value diamonds utilized by the jewelry segment occupy over two thirds of
overall rough diamond turnover. This implies that jewelry demand dominates the
majority share of overall diamond turnover and brings profits to diamond suppliers,
who are largely hanging on the jewelry sector.

On the grounds that large margins on diamonds along circulation medium, the value
of retail turnover of polished diamonds can rise to multiple times the value of stones
in its rough condition. Purchasing diamonds as jewelry is majorly done by women
and the main single practice of benefit is for engagement rings. This use has been
traditionalism in Western countries such as the United States of America, the United
Kingdom, France, Canada and other European countries. Later, in 20th century
marketing campaigns by De Beers dominantly expanded the market for gemstones in
many eastern countries.
 INVESTMENT DIAMONDS

A few diamonds can be bought as investment. Their scarcity, high value per unit of
weight and their marketability can make them lucrative to any investor. It is estimated
that diamonds sold for investment purpose accounted in terms of value, accounted for
17% of total diamond sales. Bulk items of jewelry can also be bought for business
purposes, or maybe an incentive of investment in the buying decision.

PROCESS OF DIAMONDS FROM MINES TO MARKET

The below mentioned companies of the De Beers Group are involved in the gem markets

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 CSO, which stands for Central Selling Organization it is a company which controls the
functions of marketing of the De Beers diamonds.

 DPA, which stands for Diamond Producers Association, purchases the diamonds from
South Africa and Namibia. It is also supposed to support the local South African
cutting industry.

 DITRA, which stands for Diamond Trading Company, is a wholesaler of diamonds and
it sells all gems and near gems which are at the disposal of De Beers.

 PURTRA, which stands for Diamond Purchasing and Trading Company, acts as an
intermediary between the DPA and DITRA.This is a South African company, and was
established to ensure that the De Beers profits on diamond sales will be taxed locally.

 DICORP that stands for Diamond Corporation is responsible for securing long-term
supply agreements with foreign producers. These agreements usually secure the
purchasing of a minimal portion of production capacity of the supplying mine.

Diamond distribution mediums are relatively lengthy, significantly those of

gemstones. Requirements of expertise, large financial resources and limitations on new
entrants by new dealers to this attractive market are all contributing factors to the high
margins on cutting and selling of gemstones. Generally, these margins are influenced
by commercial considerations and can differ from individual entities. The business
cycles also have a strong impact on the margins.

THE MONOPOLISTIC POWER OF DE BEERS Although De Beers’ mines produce

only about 25% of the world’s total natural diamond output, they pro- duce over 50%
of gem quality output and almost half of the world’s synthetic diamonds. However,
through the Central Selling Organization a company of the De Beers group probably
more than 80% of the world output is sold on the international markets. The declared
marketing policy of De Beers is to stabilize the markets. Thus, during prosperous times
De Beers aims to dampen price escalation, while during depressed periods the
conglomerate aims at moderating price falls. Being a strong monopoly, the objective of
De Beers is probably to increase profits in the long run.

However, the company can have an impact either on gem prices or on its quantity of
supply, but cannot control both. According to past experience it seems that De Beers
aims to influence prices by tuning the volume of supply. Considering that De Beers has
marketed more than 80% of the world gemstones and has strong financial resources, it
is evident that this Conglomerate enjoys a high degree of monopolistic power in the
market for rough gems. However,

De Beers does not control the polished gem-by them. As business cycles tend to
influence the sales of diamonds on the retail level, De Beers, with its monopolistic
power in controlling rough stones, can only respond to changes in global economic
activity in the rough diamond markets. By repurchasing rough diamonds during
depressed periods and selling more during prosperous times, De Beers can enjoy higher
profits. In order to enjoy above-normal profits, the conglomerate takes a higher risk, as
the future developments in the diamond market as in any other market cannot be
foreseen with certainty. Thus, leaning against the cycle in the diamond market exposes
FAMOUS DIAMONDS ACROSS GLOBE

1. The Great Star of Africa Carats 530.20 The Great Star of Africa passes by numerous
names. The most popular ones are the Cullinan I and Star Africa . This stone is the biggest
cleaned jewel on the planet. It is pear-formed with 74 aspects. These days, the jewel is in
plain view. It is in the Royal Scepter, showed with other Crown Jewels in the Tower of
London. This precious stone was really a piece of the biggest jewel gem ever the 3,106.75

2. Cullinan precious stone. This somewhat pale blue green precious stone originates from
India. It is an outstandingly unadulterated precious stone. The jewel is a Mogul-cut rose
molded precious stone. As of now, it is in the Diamond Treasury of Russia in Moscow. As
indicated by basic conviction, this precious stone was the jewel eye of the Hindu god
Vishnu's Idol, in the asylum sanctuary in Sriangam.

3. The Centenary Diamond Carats 273.85 Discovered at the Premier Mine in July 1986, the
Centenary Diamond initially weighed about 599.10 carats. Ace shaper Gabi Tolkowsky and
his group took about three years to change it into the biggest, most current cut, impeccable,
and top-shading precious stone. The Centenary has 247 aspects. 164 of them are on the stone
and 83 over its support. Overall, it weighs 273.85 carats. The precious stone was uncovered
in May 1991 at the Tower of London.

4. The Regent – Carats: 140.50 In spite of the fact that The Regent is by a wide margin not the
greatest precious stone, its ideal cut and limpidity make it stick out and truly important. The
stone was at first found in 1698 in India. A man named Thomas Pitt, the Governor of
Madras, procured it and sent the precious stone to England for cutting purposes.

5. 5. Koh-I-Noor Mountain of Light Carats 105.60 This oval cut precious stone is a piece of
the British Crown Jewels. The Mountain of Light , has a history that goes back to 1304. This
is the precious stone with the longest history of all the acclaimed jewels. It was the Rajahs of
Malwa that caught the precious stone in the sixteenth century. Later on, the Mogul Emperors
gained the precious stone and put it in the renowned Peacock Throne.
LITERATURE REVIEW

1. Indian Diamond Industry Out of Recession

Asha, K., & Christopher, S. E. (2014). A Study On Buying Behaviour Of Customers Towards
Branded And Non-Branded Gold Jewellery With Reference To Kanyakumari District. International
Journal of Management, 5(10), 105-114.

In this article he presented that gems and jewelry industry has registered a 16 % increase in the total
gems and jewelry exports in 2009-10. The industry contributes 13 % to India’s total diamond
exports. The figure stated that India’s diamond share in global market witnessed an increase from 60
% to 70 % in value terms. The USA remained India’s largest consumer of jewelry. He stated that
Indian diamond industry has now come out of recession.

2. Entrepreneurial Strategic Innovation Model for Attaining Premium Value for the Sri
Lankan Gem and Jewelry Industry

Ekanayake, S., & Abeysinghe, D. (2010). ENTREPRENEURIAL STRATEGIC INNOVATION

MODEL FOR ATTAINING PREMIUM VALUE FOR THE SRI LANKAN GEM AND
JEWELLERY INDUSTRY. Asian Academy of Management Journal, 15(2).

They observed that the gems and jewelry industry in Sri Lanka has been capable enough to develop a
competitive product base but has been positioned to experience a reduction in market value. This
reduction has resulted in the disintegration of the industry value system, forcing the firms to work in
isolation. They stated that the industry value system is handled by private sector entrepreneurship
without state interference.

3. Indian Gems and jewelry: A Sector Study

Kumar, N. (2012). Problems and prospects of Indian exports of gems and jewellery.

EXIM Bank identified the various challenges and strategies for Indian gems and jewellery sector.
Bank in his study explained that there has been a loss of market for gems and jewellery exports due
to recession and global economic slowdown. The bank has presented market analysis to understand
the competitive position of India vis-à-vis other competitor countries, and also has identified the
export destinations which have not been fully tapped by India for its exports of gems and jewelry
under select product categories.
4. Indian Diamond Industry Stands above the Others

Kuriyan, V. (2010). Indian Diamond Industry Stands above the Others. Published in Solitaire
international, Meneck Davar Publication, Mumbai, 28-38.

He reported that the Indian diamond industry stands clearly above most of the competition. He told
that the single easiest way to check on how the Indian diamond industry is doing today is to look at
all the online diamond trading systems such as index online, etc. He also reported that the industry
should push harder to ensure that its products get to more markets around the world if it wants to
sustain value growth.

5. Italian and Indian Gold and Jewelry SMEs, Marketing Practices in the USA: A
Comparative Case Study

Simoni, C., Rabino, S., & Zanni, L. (2010). Italian and Indian gold and jewelry SMEs, marketing
practices in the USA: A comparative case study. Journal of Small Business and Enterprise
Development, 17(3), 403-417.www.emeraldinsight.com

They examined current patterns of international marketing activities of Italian gold firms with a
special emphasis on the USA market and examined them with those adopted by Indian gold firms.
They evaluated small companies based in two regions (Arezzo, Italy and Hyderabad, India). They
told that competitive behavior of Small and Medium Enterprises (SMEs) is primarily reactive,
whereas Indian companies strategically focus on the expending Indian immigrant community.

6. The Mazzel Ritual: Culture, Customs and Crime in the Diamond Trade

Siegel, D. (2009). The Mazzel Ritual: Culture, Customs and Crime in the Diamond Trade. Springer
Science & Business Media.

She highlighted the presence of Indian dealers, community and Indian market in Antwerp. In his
study, Siegel stated that most of the families involved in the diamond sector in Antwerp came from
the region of Gujarat, a region with a longstanding tradition of migration all over the world.

7. Gem and Jewelry Industry: Global and Indian Scenario

Mukherjee, I. (Ed.). (2008). Gems and Jewellery Industry: Global and Indian Scenario. Icfai
University Press.

She dealt with an emerging global industry the diamond industry, which is on the way to huge
information. This industry is extremely global in nature. She told that gems and jewelry industry can
be classified into various sub-sectors such as gemstones, jewelry and pearls. Over the years, the
global gems and jewelry markets have been impacted by various developments like falling trade
barriers, increasing competition, changing customer preferences and developments in technology in
various areas. As one of the most traditional industries, it has witnessed sweeping changes since the
beginning of this millennium. Supply sources have become fragmented, resulting in shooting up of
raw materials prices. Regulators are cautious and consumer activism is on the rise. These pressures
have driven changes that are more intense and lasting than any witnessed in the previous fifty years.

After exploring the position of Indian gems and jewelry industry, she observed that India has various
advantages to emerge as a gem and jewelry hub. It has the largest and best artisan force for designing
and crafting the jewelry in the world. There is a considerable scope of value addition in terms of
capacity building at the domestic front, quality management and professionalization. Realizing
enormous potential of the industry, the Ministry of Commerce, Government of India declared gems
and jewelry a thrust sector for export promotion. In this context, the first section of study explained
the emerging trends and evolving dynamics of the global gems and jewelry industry as well as
identified the future trends. The second traced the significance of India within global gems and
jewelry industry, and covered the current scenario of the sector in India.

8. The Rise to Prominence of the Modern Diamond Cutting Industry in India

Sevdermish, M., Miciak, A. R., & Levinson, A. A. (1998). The rise to prominence of the modern
diamond cutting industry in India. Gems & Gemology, 34(1), 4-23.

They studied in their paper the rise of the modern diamond cutting industry in India and its impact on
the global diamond trade. They examined that the modern diamond industry in India grew at a
remarkable rate, which is 82-fold by polished weight and 249-fold by polished value. Today India
accounts for about seventy per cent by weight and thirty-five per cent by value of diamonds polished
annually worldwide. India has had a profound effect on this trade because of the enormous quantities
of small and low-cost diamonds manufactured there.

9. Panorama of Gems and Jewelry in Indian Historical Setting

Shukla, M. S. (2000). Panorama Of Gems Jewellery In Indian Historical Setting. Kala Prakashan.

She highlighted the profile of gems and jewelry in the Indian historical perspective. He told that
pearls and precious stones were known as specialty of India at a very remote epoch. India was indeed
the first and for a long times the only source of diamonds and pearls known to the European nations.
Further, he dabbled in sources and geographical distribution of gems, physical and chemical
properties thereof and there working, occult and religious association and treatment of jewels for
jewelry. In India there were eight regions or division of the country in which the diamond is said to
occur. The areas supposed to produce diamonds are Klinga, Kosala, Himalaya, Matanga, Pundraka,
Saurastra, Vairagara, and Sopara. Indian jewellery by the early historic period is remarkable for its
sophisticated aesthetics and an elegant unified style. It represents master pieces of design and
craftsmanship in gems and precious metals.
He told that it is a bid, a venture to trace the career of gems from their matrix to jewellery forms and
to retrieve them from dim recesses of time, distant interiors and dark corridors of centuries. The book
also broached the nature and extent of their viability in relation to social environment, ethos and
values of civilization entities.

10. Export Problems and Prospects of Indian Diamond Industry

Varma, M. L. (1983). Export prospects and problems of Indian diamond industry.

He studied that a majority of the exporters in Indian diamond industry are facing various problems.
The import of raw materials is the biggest problem for diamond manufacturers. He analyzed that low
quality and high prices of raw materials are the main problems of this industry that have been faced
by the exporters. Lack of training institutes, little use of modern techniques and many others
problems are in this industry. On the other hand, Verma stated that diamonds are the single largest
export commodity earning foreign exchange. In his study he reported that in period of five years
from 1979 to 1983, diamond imported by the USA from India rose from 33 per cent to 48 per cent
and diamonds imported by Japan from India increased from 36 per cent to 50 per cent.

11. Export Promotion in India

Purushothaman, Nair

He highlighted the export potential and problems of diamond industry. He told that the diamond
industry is considered to be a member of the traditional industry group. Diamond industry in India is
making larger contribution to our export earnings year after year. In terms of value the export
earnings from diamonds were Rs. 44.8 crores in 1970-71 and Rs. 618.40 crores in 1980-81. He told
that India is neither a source nor a market for diamonds, but only an intermediate processor, which
imports rough stuff to be almost entirely exported after processing. He discussed various problems
faced by the diamond industry in special reference to Kerala such as supply of poor-quality stones,
poor bank facilities, Labour problem and arbitrary pricing etc. In the end he offered some suitable
policy implications to get rid of various problems that have been faced by the diamond industry.
Objective

 To find the trends of diamonds price movements,

 To find trends of pricing based on different diamond,
 To explore different international factors which decide the diamond price in global market

RESEARCH METHODOLOGY

 Research type and general goal

• The proposed research is applied and descriptive,

• The proposed research is prepared from Qualitative Reference.

 Methods and Techniques In this research we will use the following methods to accomplish the
proposed tasks:

• We have collected all data from secondary sources,

• We have visited some of the renowned store in our local market i.e,

• TANISHQ Jewelers.

• KALYAN Jewelers.

• GUJRANWALA Jewelers.

• We have taken data from certain websites

RESULT AND DISCUSSION

HERE, WE LIST THE MAJOR FACTORS  THAT AFFECT DIAMOND PRICE AND
THAT WE TAKE INTO CONSIDERATION WHEN VALUING YOUR DIAMONDS.
T
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C
A grading system, instituted by the GIA, was implemented to evaluate Diamonds based on four
aspects. These four grading systems are known as "the four C's", in which all Diamonds are
evaluated:

This guide explores each component of a diamond and what factors have an effect on diamond costs,
absolutely or negatively. The classical variables of diamond valuation are called the four C’s: Cut,
Clarity, Color and Carat weight. However these are simply the core, basic factors. There are a large
number of alternative factors to be taken into thought once shrewd what proportion a diamond is
value. WP Diamonds provides a definite worth through an expert valuation for your rings, jewelry,
or loose diamonds.

Often, the condition of a second hand diamond could be a key element in its valuation. though the
toughest natural material famous to man, second user diamonds could also be broken, abraded, or
broken. The GIA have created a series of videos concerning grading that you'll see here. Brilliance
includes a nice diamond education section for you to be told a lot of. you'll conjointly see the GIA
education guide their web site.
DIAMOND COLOR EXPLAINED
Diamonds come in an array of dazzling colors. Along with cut, clarity, and carat weight, color is one
of the 4 C’s of diamond quality and is an important attribute for assessing your stone. Color has a
significant impact on the appearance and value of your diamond and is crucial to think about when
looking to buy or sell.
In this article, we will answer the following questions:
 How is diamond color assessed?
 What is fluorescence?
 How do colored diamonds work?
 How does color affect the value of my diamond?
 What color grade is my diamond?

HOW IS DIAMOND COLOR ASSESSED?

Diamonds are assessed by how close to colorless they are (the exclusion to this is fancy colored
diamonds). While a diamond may appear white to the naked eye, few diamonds truly are. They
generally range from colorless to slight hints of yellow or brown. The GIA, considered the industry
standard in diamond grading, ranks diamonds D (completely colorless) to Z (slight hints of yellow or
brown). D-color diamonds are the most valuable and Z-color diamonds are much less desired on the
market. These D to Z grading are used across the industry and can be an important way to assess the
quality of your diamond. The color grading can be interpreted as the following:
A gemologist evaluates shading grade by contrasting a precious stone with a lot of "ace stones".
These are jewels that range from D-Z.
WHAT IS FLUORESCENCE?
Another important aspect of diamond color is fluorescence. When a diamond has fluorescence, it
means that the diamond emits visible light. When put under ultraviolet light, a diamond with
fluorescence will appear to glow. GIA grades fluorescence from faint to medium to strong to very
strong. It is often very difficult to distinguish between a diamond with fluorescence and a diamond
without—both appear very similar.
Fluorescence can have both positive and negative effects on a diamond’s appearance and value.
Sometimes, a very strong fluorescence can create a hazy color appearance. In these cases,
fluorescence often decreases a diamond’s value. On the other hand, blue fluorescence can make
yellowish diamonds appear more colorless, increasing their appearance and value.

HOW DO COLORED DIAMONDS WORK?

Diamonds that fall outside of the D to Z color range are considered fancy colored diamonds. Fancy
colored diamonds are incredibly rare and come in colors including fancy pinks, fancy blues, fancy
greens, fancy violets, fancy yellows, and more. Fancy colored diamonds are assessed based on three
attributes—hue, saturation and tone.
Hue- This refers to the actual color of your diamond—whether it be pink, blue, yellow, orange, etc.
Many colored diamonds also exhibit secondary hues. For example, blue diamonds often contain
secondary gray colors. If a blue diamond exhibits a secondary gray tone, it may be labeled as either
grayish blue or gray blue. These terms can be applied to all colored diamonds with secondary colors.
These terms differ slightly:
 “Grayish blue” diamonds – exhibit some gray hue but primarily a blue hue (ie. 20% gray and 80%
blue).
 “Gray blue” diamonds – exhibit an even larger amount of gray but are still mainly blue (ie. 40%
gray and 60% blue)

When describing a diamond, the first adjective (in the above examples either grayish or gray) is
considered the modifier and blue is considered the primary color. If the modifying color is more
valuable than the primary color, the modifier will increase the stone’s value. If the modifying color is
less valuable than the primary color, the modifier will decrease the stone’s value. In the case above,
because gray is a less valuable stone color than blue, a grayish blue or a gray blue diamond will be
less valuable than just a pure blue stone.

Tone- This signifies how light or dark the color of the diamond is.
Saturation- This refers to the strength or weakness of the color.
Depending on its hue, saturation, and tone, your fancy colored diamond will be categorized as one of
the following color intensities (ranging from least intense to most intense):
 Fancy Light
 Fancy
 Fancy Intense
 Fancy Vivid
 Fancy Deep
This color label will have a large impact on the appearance and value of your diamond. The more
color present, the more valuable it is.

HOW Does the colour factor influence the valuation of DIAMOND?

Colour Grade Price Per Carat % Drop in Price From Next Highest Grade Color has a significant
impact on the value of your diamond. As color grade decreases, price can drop significantly. Below is
a real-world example of price differences based on color grade between otherwise identical 1-carat
diamonds As carat weight increases, the price difference between different color grades increases even
more dramatically. In this article, we will respond to the accompanying inquiries concerning precious
stone clearness 2. How is precious stone lucidity evaluated? 3. In what manner will jewel clearness
influence my precious stone's worth? 4. What sorts of incorporations exist? 5. How would I decide my
precious stone's lucidity? Definition Diamond clearness alludes to how faultless a precious stone is.

The size, sum, and presence of incorporations defects inside the precious stone and imperfections
blemishes on the outside of the jewel will decide your jewel's clearness grade. Alongside shading, cut,
and carat weight, lucidity is one of the 4 C's utilized to decide precious stone quality. Lucidity can
significantly affect the appearance and estimation of your stone. Precious stones are given a clearness
positioning dependent on the sum, size, and position of considerations and flaws.
  D, E, and F – drab (for the most part all seem dry to the untrained eye)
 G, H, I, and J – close to dull (normal; regularly still seem drab to the unaided eye)
 K, L, M – swoon (slight unmistakable tint)
 N, O P, Q, R – extremely light (progressively unmistakable tint)
 S, T, U, V, W, X, Y, Z – light (darker or yellow tint is entirely recognizable)

DIAMOND CLARITY
In this article, we will answer the following questions about diamond clarity:
1. What is diamond clarity?

Price Per % Drop in Price From Next

Colour
Carat Highest Grade
Grade
D $7250 10%
E $6500 12%

F $6100 7%

G $5450 12%
H $5000 9%
I $4300 16%

J $3600 19%

K $3150 14%

2. How is diamond clarity graded?

3. How will diamond clarity affect my diamond’s value?
4. What types of inclusions exist?
5. How do I determine my diamond’s clarity?

WHAT IS DIAMOND CLARITY?

Definition: Diamond clarity refers to how flawless a diamond is.

The size, amount, and appearance of inclusions (flaws within the diamond) and blemishes (flaws on
the surface of the diamond) will determine your diamond’s clarity grade. Along with color, cut, and
carat weight, clarity is one of the 4 C’s used to determine diamond quality. Clarity can have a
significant impact on the appearance and value of your stone. 
WHAT TYPES OF DIAMOND INCLUSIONS EXIST? While there are a wide scope of sorts of
consolidations, standard flaws incorporate Feather inside split, made during or after game plan can
impact valuable stone's strength Pinpoint a humble mineral valuable stone inside the gem that will
appear as an incredibly little spot Crystal a valuable stone contained inside the gem Needle a pitiful,
delayed valuable stone inside the gem that will appear as a bar shape Cloud a lot of pinpoints that are
hard to perceive from one another shows up Twinning Wisp molded on account of improvement gives
up in the valuable stone when a gem stops game plan and starts again soon, this thought will happen
appears as a social event of tufts, pinpoints, jewels, and fogs Round valuable stones are the most
gainful of shapes cushions, princess cuts, radiants and asschers are moreover particularly standard,
anyway worth very much not as much as rounds. Emerald cuts, ovals and pears are worth even less
and marquises are worth less still. How precious stone shapes influence costs is reliant on style
patterns and notoriety and shifts throughout the years. How to know what amount my precious stone is
value? Size is a decent spot to begin when responding to this inquiry, as the size of a stone is
seemingly one of the most significant factors in valuing a jewel. There are two significant focuses with
regards to jewel size bigger is better and "enchantment sizes" assume a huge job.

HOW IS DIAMOND CLARITY GRADED?

Diamonds are given a clarity ranking based on the amount, size, and position of inclusions and
blemishes. Most diamonds have some imperfections, but the nature of these imperfections will
determine your diamond’s clarity grading. The GIA, the industry’s leading organization, ranks
diamond clarity as follows:
HOW WILL DIAMOND CLARITY AFFECT MY DIAMOND’S VALUE?
If you are looking to sell your diamond, you may be concerned with how your diamond’s clarity

Clarity Grade Meaning Description

No internal or external flaws. Incredibly rare and

FL Flawless
valuable.
No internal flaws but some surface flaws. Still very
IF Internally Flawless
rare and valuable.
Slight internal flaws that are difficult to see even with
VVS1, VVS2 Very Very Slightly Included
10x magnification.
Slight internal flaws that are just barely visible with
VS1, VS2 Very Slightly Included 10x magnification. Flaws are typically not visible with
the naked eye.
Slight internal flaws that are visible with 10x
SI1, SI2 Slightly Included
magnification. Flaws may be visible to the naked eye.
Inclusions that are readily visible to the naked eye.
I1, I2, I3 Included Inclusions may affect transparency and brilliance. Less
desired.
grading will affect its value. Diamonds are ranked from FL to I3, with FL being the most rare and
valuable and I3 being less rare and less valuable. The bottom line is: the more flawless your
diamond, the more it is worth.
As diamonds’ clarity grade decreases, price often drops dramatically. Below is a real-world example
of how clarity grade affects the price of a diamond. The following table shows price differences
based on clarity grade between otherwise identical 1-carat diamonds:
Clarity Price Per % Drop in Price From Next Highest
Grade Carat Grade
IF $8000 11.25%
VVS1 $7100 13%
VVS2 $6500 9%
VS1 $6200 5%
VS2 $5500 13%
SI1 $4800 15%
SI2 $3700 30%
I1 $3200 16%
 I2 $2400 33%

With larger stones, the price differences between identical diamonds of different clarity grades
increases even more significantly.

If you would like to determine how much your diamond is worth or are interested in selling your
piece, fill out the online form and one of our in-house diamond experts will be in touch shortly with
an initial price quote. WP Diamonds offers a quick, secure service for selling your diamonds,
designer jewelry, and luxury watches.

WHAT TYPES OF DIAMOND INCLUSIONS EXIST?

While there are a wide range of kinds of incorporations, regular blemishes include: Feather –inside
split, made during or after arrangement; can influence precious stone's solidness
 Pinpoint –a modest mineral precious stone inside the jewel that will show up as an extremely
little dab
 Crystal –a precious stone contained inside the jewel
 Needle –a meager, prolonged precious stone inside the jewel that will show up as a bar shape
 Cloud –a bunch of pinpoints that are difficult to recognize from each other; makes a dim
appearance
 Twinning Wisp –shaped because of development surrenders in the precious stone; when a jewel
stops arrangement and starts again sometime in the future, this consideration will happen; shows up
as a gathering of plumes, pinpoints, gems, and mists

SHAPE
Round precious stones are the most profitable of shapes; pads, princess cuts, radiants and asschers
are additionally exceptionally mainstream, however worth a lot not as much as rounds.
Emerald cuts, ovals and pears are worth even less and marquises are worth less still. How precious
stone shapes influence costs is reliant on style patterns and notoriety and shifts throughout the years.
SIZE
How to know what amount my precious stone is value? Size is a decent spot to begin when
responding to this inquiry, as the size of a stone is seemingly one of the most significant factors in
valuing a jewel. There are two significant focuses with regards to jewel size: bigger is better and
"enchantment sizes" assume a huge job.
Enchantment sizes incorporate 0.50 cts, 1.00 cts, 2.00 cts, 5.00 cts. When you pass an enchantment
size, the cost per carat increments. For instance, a 1.00 ct stone is worth around 15-20% more per
carat than a 0.90 ct stone. The equivalent goes for a 5.00 ct versus a 4.90 ct.

CUT
When thinking about how cut evaluations influence the cost of jewels: superb cut is ideal. It is worth
around 15% in excess of a Very Good (VG) cut evaluation, which is worth roughly 15% in excess of
a Good (G) cut evaluation.
Just adjusts are given cut evaluations by the GIA.
A triple EX grade (for example EX cut, EX clean and EX balance) is commonly worth 7-10% in
excess of a triple VG cut evaluation.

POLISH
As far as how clean influences the cost of a precious stone, it has a lesser effect than cut evaluation,
particularly between a VG grade and a G grade, for instance.
A triple EX grade (for example EX cut, EX clean and EX balance) is commonly worth 7-10% in
excess of a triple VG grade.
Best Diamond Certification and Grading
The price you will end up paying for a diamond is highly dependent on how the diamond is graded in
the grading report and/or "certificate”. 
The Gemological Institute of America's (GIA), HRD Lab's, American Gem Society's (AGS), and
Gem Certification and Assurance Lab's (GCAL) reports command the highest premium in the
industry. However, among all the other gems labs, there is significant discrepancy in how they grade
diamonds and the reliability of their grading  reports.
Please see our comments about the difference between AGS vs GIA below and where one might
have an edge over the other. Overall, GIA is still considered as the standard-bearer in the industry
when it comes to the education and grading of diamonds.Here are our notes on IGI vs GIA as well in
case you are interested.    
Sometimes you might get conflicting opinions because gemologists might tailor their opinion to the
lab that graded their diamonds in order to make a sale. These opinions are obviously biased and you
should vary of such opinions while shopping for a diamond. Please follow our in depth  diamond
guide for each shape of diamond to make an informed judgement while buying a diamond.
The diamond trade has evaluated significantly over the last decade. Now basically everyone works
with the same set of dealers and acts as intermediary between you and the dealer.
Let's look at each lab and examine who they are and what they do. 

GIA:
The Gemological Institute of America is a non-profit organization dedicated to the research and
education of gems and jewelry. They study and grade all types of gemstones. In addition to the lab
services, GIA also trains gemologists and offer in depth education and research support to the
diamond industry. At present, GIA’s diamond grading reports are top rated diamond verification and
“certification” documents in the diamond industry.
GIA offers two types of diamond grading reports. The full reports and the diamond dossiers for small
diamonds. The dossiers are cheaper than the full reporst and do not include the full plot of the
diamond which show the exact location of inclusions in a diamond. Because the location inclusions
is not determined in dossier reports, GIA requires a mandatory laser inscription of the diamond
which is not the case with full reports: dealers can buy the laser inscription as a added service for
$30, but it is not required.
AGSL - AGS:
The American Gem Society is a membership organization of jewelers, suppliers, appraisers, and
traders. The company has been around since1934; however, its laboratories (American Gem Society
Laboratories – AGSL) were founded in 1996. They also have an advanced instruments division
founded in 2004. AGSL is the division that grade diamonds and have developed their own standards
for grading diamonds. AGSL is a close competitor to GIA and has a strong reputation in the diamond
industry.

HRD Labs:
HRD Antwerp’s is mainly owned by Antwerp World Diamond Center. AWDC was founded in 1973
and represents the Belgian diamond industry. As you might know, Antwerp is one of the main
centers for diamond trading and supply. HRD Lab’s standards are similar to ones used by GIA. They
also follow grading rules set by the International Diamond Council. HRD Labs are very reliable.
IGI:
The International Gemological Institute was established in 1975 and is headquartered in Antwerp –
one the key centers of the diamond business. IGI has several branches all around the world and is
one of the largest labs in the world. It also has a gemology school. Since IGI is so big, their labs in
different countries seems to be using slightly different criteria while grading diamonds hence
inconsistencies in overall grading results. However, they seem to be improving their overall
performance. We would grade IGI as slightly less strict than GIA or AGS. It is a good idea to expect
one grade inconsistency while buying IGI diamonds. However, no two diamonds are the same, so
generalizing anything when comes to buying diamonds is not a good idea – each case is different and
therefore should be treated as such.
Con:
Expect one grade inconsistency in overall grading when it comes to IGI's grading in all four Cs. 
GSI:
Gemological Science International mainly grades diamonds for some of the large chain stores in
mass numbers. Recently, they have expanded their operations to a number of countries worldwide.
GSI seems to be a favorite of large stores as they grade diamonds much faster than GIA or AGS. GSI
is close to IGI in how they grade diamonds and usually grade diamonds one grade lower than GIA or
AGS. Again, stated above, each diamond has its own characteristics so these insights are good for
general information purposes as it is important to analyze each diamond individually. However, if
you are not well informed or if you don't have the time to learn about diamonds, it is a good idea to
go for either GIA or AGS. 

EGL:
The European Gemological Laboratory used to have significant shares in the diamond grading
business. However, it has lost much of its credibility. They seems to be reorganizing the organization
and for the time being it is a good idea to not solely rely on EGL reports. Even RapNet do not allow
EGL graded diamonds to be listed on their platform.

How are diamonds certified?

In order to make an informed decision on the various diamond grading reports/certifications, it is
important to understand exactly how diamonds are graded to begin with. The major gem labs have
remarkably similar processes for analyzing and grading diamonds. The process usually involves
several graduate gemologists independently assessing the cut, color, clarity and carat weight of the
diamond, with the final grade being extracted after an evaluation of all the assessments. This process
helps to reduce the potential for human error in the determination of a diamond’s final grade, but it
still doesn’t eliminate it. Grading labs have been known to give different grades to diamonds that are
sent to them for the second time, and this difference can get more noticeable when there are multiple
diamond certification labs in the mix.
Diamonds are not certified..... no lab would say that they are "certifying" diamonds. Legally
speaking, it can put them in trouble. All they say is that they grade diamond based on their best
judgement. 

Certificate Standards:
Another major consideration in diamond certification is the certification standards that the various
labs operate by. In order to illustrate this point, one could consider GIA and IGI side by side: GIA is
a non-profit organization while IGI is a commercial institution. Expectably, GIA has been known to
be somewhat more objective than IGI when grading diamonds for the simple reason that the latter is
bound by their profit motive to be more customer oriented (the customers in this case being diamond
merchants.) The disparity in results is an open secret in the industry. Sometimes commercial labs
would give diamonds an average of one point higher grading than those given by GIA and AGS to
make their clients happy. What this means for you as a buyer is that while you might find two
diamonds with similar grades from IGI and GIA, with the one from IGI having a lower price tag than
the one from GIA, it may seem like a bargain to go for the one with the lower price, whereas in
reality, you would have paid the same price as the diamond would probably have been graded by
GIA with a lower grading and therefore be sold at a lower price.
In a nutshell, from a buyer’s perspective, diamond certification is very important while buying a
diamond. The diamond grading or certification come from a wide variety of labs, all with varying
reliability, but in order to get the best possible deal, your best bet would be to go for a diamond that
has either  GIA or AGS certification.

THE GIA DIAMOND CUT GRADING SYSTEM

The most important innovation in the diamond industry in the 1950s is undoubtedly the GIA
(Gemological Institute of America) cut grading system that was introduced to serve as the
benchmark by which gemstones, diamonds specifically, would be judged. Although the 4 Cs of
diamond grading were quite well known and there were a number of other grading systems in use, it
was felt that there was a need to have a uniform grading system to promote consistency across the
industry. Today, the GIA cut grading system is the most widely used and accepted grading systems
for diamond.
The key features of a diamond that the system takes into consideration when assigning a grade are:
color; clarity and make, comprising of the cut, polish and finish. There are five grades a diamond
might be assigned after being evaluated by the GIA:
Excellent Grade – Diamonds with this grade will have an even pattern of light and dark areas when
one looks at stone, as well as high brilliance and scintillation.
Very good Grade – Diamonds in this category will also have high brilliance and scintillation, but
with much more noticeable darkness in the center or around the edges. The pattern of the diamond is
also a major consideration. Sometimes, a diamond may be top-notch in all the other aspects, but have
a pattern that is imperfect, resulting in a drop from the “excellent” grade to “very good.”
Good Grade – Here, the diamonds will generally be markedly darker than those in the higher grades,
or having insufficient scintillation and brilliance. The pattern too will generally be of less quality. A
diamond could also get this grade as a result of its weight ratio. A diamond has an unduly heavy
weight ratio when it is heavier than an average gem of the same diameter. In such an instance, it will
be downgraded one step.
Fair Grade – A diamond with this grade will generally be one that seriously lacks brilliance or
scintillation. It could have dark patches in major areas of the diamond, such as the table area and the
girdle. Faulty cutting and noticeable imperfections in the symmetry and proportion of the diamond
could also be the reason it has this grade.
Poor Grade – The diamonds that fall into this category are those with markedly faulty features. They
will generally have very poor proportions and symmetry as a result of poor cutting, as well as a very
little brilliance or scintillation. It is in this category that you will find “nail heads”, where the stone
has a black patch right in the center, and “fish eyes” where the brilliance is completely washed out in
the middle. Here again, the weight ratio oof te stone is an important consideration.
Apart from the features like brilliance; scintillation; weight ratio and symmetry that have been
mentioned above, other criteria that are considered in the GIA diamond cut grading process include
the durability, including thin girdles as well as inclusions that act to weaken the gem and polish,
which covers the overall quality of the stone’s surface polish, taking note of any nicks, scratches,
chips etc.

The AGS American Gem Society Proportion-Based Cut Grade System.

The AGS American Gem Society Proportion-Based Cut Grade System is a major challenger to the
GIA grading system for dominance as the industry standard grading system. The 2 American Gem
Society and the GIA Gemological institute of America were funded by the same person, the famed
Robert Shipley. Due to disagreements over the parameters and methodology by which diamond cut
should be graded, both organizations drifted apart, leading to AGS’s establishment of its own lab and
grading system.

As opposed to the GIA system that gives an overall designation based after taking all the diamond’s
features into consideration, the American Gem Society’s Proportion-Based cut grading system
considers the color, clarity and cut of the diamond and assigns each feature of the diamond one of 11
levels ranging from 0 to 10. 0 being the best, and 10 the worst. A diamond that receives three 0s is one
that has been cut perfectly, with flawless polish, proportions and symmetry, as well as the best possible
light performance.

Clarity Scale The clarity scale, as the name implies, measures the clarity of the diamond and the
extent of the inclusions it contains. A 0 level on this scale means that the diamonds is flawless and
includes no noticeable inclusions whatsoever, making the clarity flawless. Levels 1 and 2 are described
as being very very slightly included while levels 3 and 4 are very slightly included . Diamonds given
levels 5 and 6 on this scale will have more noticeable, albeit still slight inclusions, as opposed to those
with levels 7, 8, 9 and 10, which will have substantial inclusions and are simply described in the
grading system as included .

Color Scale Here too, the scale measures exactly what its name says the color of the stone. A diamond
that is assigned a level between 0 to 1.0 is one that is completely colorless and meets the industry ideal
as regards diamond color. Those with 1.5 to 3.0 are described by the grading system as being near
colorless while from 3.5 to 50 have faint colorations that are just slightly visible to the naked eye. 5.0
to 7.0 have very light coloration while the coloration present in those with levels 7.5 to 10.0 is still
light, but far more noticeable. Any diamond with coloring beyond that will be one with the fancy
yellow color that is not considered very valuable.

Cut Scale This measures the quality of the diamond’s cut. A diamond with a 0 level, or the ideal
grade, will be one that has flawless cut, with perfect symmetry, even pattern of light and dark areas
when viewed and high brilliance and scintillation. The polish of the diamond must also be perfect and
coDiamond Certification GIA, AGS, HRD, IGI, EGL, GSI, GCAL, PGS Posted by Sharif A. K on 1st
Nov 2018

Factors Influencing Price Movements

Industrial diamonds have wide industrial uses. It is suggested therefore that the level of economic
activity in general and that of manufacturing production in particular will influence this market
segment. Prices are expected therefore to be affected by the international business cycles.
Nevertheless, during the last decade, prices of synthetic diamonds, particularly of grit, have fallen
consistently.

Further price decreases can be expected over this decade, as the synthetic diamonds market will
become more competitive. It is expected that new producers will enter this market, and, together with
further technological developments, it is likely that both the price of grit and stones will drop. It is
worth noting that the markets for industrial diamonds have expanded during the last decade in the
United States. As the United States tends to lead the world in technological development, further
expansion of markets for industrial diamonds in other countries can be suggested.

Purchasing of jewelry diamonds for various family occasions becomes a tradition in many societies.
This means that even during economic recession, gemstones will be bought as presents. However, it is
assumed that during bad times the demand may shift, at least to some extent, from better gems to
cheaper and lower- quality gems. During prosperous times the opposite will occur and more expensive
gems will be bought. It is suggested therefore that prices of lower quality and less expensive gems
will be less sensitive to the business cycle than prices of higher quality gems, which are expected to
fluctuate widely in response to the business cycle. As higher inflation rates and negative real interest
rates tend to encourage consumption, it is expected that these economic indications will be positively
correlated with price movements of jewelry diamonds.

Although an economic measure, such as disposable income, is supposed to correlate negatively with th
e investment price of diamonds, the degree of correlation is believed to be lower than with the price m
ovements of jewelry diamonds.It is suggested that price movements in investment diamonds will be
particularly sensitive to portfolio considerations. Monetary and financial factors which tend to have an
impact on portfolio considerations will probably affect prices of these diamonds. Thus, factors such as
the exchange rate of the US dollar, inflationary expectations and the magnitude of real interest rates
can all play an important role in price movements in this market segment.

Precious stone's tremendous hardness adds as a gemstone to its ampleness and noteworthiness. A
Diamond is impervious to scratching on account of its hardness, as the main thing it can scratch is
another Diamond. This flexibility enables it to withstand ordinary mileage past most gemstones '
abilities. Precious stones are likewise difficult to clean because of their hardness-they must be cleaned
with extraordinary Diamond saws on the saw sharp edges and edges with a dainty layer of Diamond.

A GIA-established evaluating framework was executed to survey jewels based on four viewpoints.
These four grading systems are known as "the four C's", in which all Diamonds are evaluated:
conclusion

REFERENCES

 https://www.pricescope.com/diamond-prices/diamond-prices-chart/

 http://www.idexonline.com/diamond_prices_index

 https://en.wikipedia.org/wiki/Diamonds_as_an_investment

 https://www.ajediam.com/historical_diamond_prices.html

 https://www.minerals.net/gemstone/diamond_gemstone.aspx

 https://insights.abnamro.nl/en/2016/11/diamond-market-outlook-outlook-is-improving

 https://www.statista.com/topics/1704/diamond-industry/

 https://diamondproducers.com/diamond-industry/productionstats/

 https://kimberleyprocessstatistics.org/public_statistics

 http://www.diamondshades.com/statistics-diamond-production-and-supply/

 https://www.wpdiamonds.hk/en/2017/05/18/diamond-clarity/

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 https://www.petragems.com/education/diamond-certification-gia-ags-hrd-igi-egl-gsi-gcal-pgs/

 https://www.minerals.net/gemstone/diamon_gemstone.aspx

 https://shodhganga.inflibnet.ac.in/bitstream/10603/9748/11/11_chapter%202.pdf

 https://www.costerdiamonds.com/nl/top-5-most-famous-diamonds/

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