Diamond Prices

Diamond Prices?

The 1953’s box office movie  Gentlemen Prefer Blondes, Marilyn Monroe famously sang that diamonds are a girl’s best friend. And if you click on a bridal website or hang out in front of the windows at a De Beers store’s, you won’t find any evidence to the contrary. Diamonds, the hardest substance in the world—and one of the most expensive—remain the number one choice for engagement rings in the U.S. and among the most popular stones in other types of jewelry pieces.

Wearing a carat or two of bling on your left hand isn’t an age-old tradition. Diamonds were very rare until the late 19th century, when significant deposits were unearthed in Africa.

Although diamonds became much more common, they didn’t become less valuable.

For  a century, the Luxembourg / Johannesburg company De Beers held a virtual monopoly over the diamond industry, and by limiting the supply kept prices stable—and artificially inflated.

Discoveries of large deposits of raw stones in Russia, Australia, and Canada broke De Beers’ monopoly over the supply of diamonds; it now supplies only about one-fifth of rough diamonds. But because only a handful of companies still own most of the world’s supply, and De Beers itself controls two-thirds of the world’s diamond distribution, prices haven’t dropped. In fact, they keep rising.

De Beers also largely invented demand for diamonds. In the 1930s, De Beers hired the New York advertising agency N.W. Ayer & Son to polish up the gem’s image, eventually leading to slogans like “A Diamond Is Forever” and the widely held idea that wannabe grooms should pony up one- or two-months’ salary for a rock. Yep, the social custom determining how much to pay for an engagement ring was trumped up by the company selling most of the diamonds.

Diamond Price

Diamond Price Rules

For all diamonds, there are a few basic universal rules.

First of all, diamonds are all priced per carat.  So, lets say a 0.50 carat diamond has a price of $1400 per carat.  That diamond’s price for the stone would be $1400 * 0.50, or $700. Secondly, diamond prices per carat increase as you jump up to higher weight categories.

Therefore, diamond prices increase exponentially with weight, since their prices increase both due to the increased weight and due to the higher price per carat for the increased weight category.

The Importance of Categories

I stress categories, because you might mistakenly believe that prices per carat increase continuously as weight is increased, but this is not the case.

Since diamonds are a retail product driven more by emotion than reason, a 0.99ct diamond is worth only about 1% more than a similar diamond weighing 0.98ct.  But a 1.00ct diamond is worth about 20% more than a similar 0.99ct diamond.  Why is that?

Maybe because now you can say it’s a “one carat diamond,” or maybe because now it’s three full digits.  Who knows.  But with diamonds, it’s all about feelings. This little quirk about the business is the sole reason there are so many poorly cut diamonds out there.

How Cutting Impacts Price

You could imagine very easily that if there’s a 20% price jump from a 0.99ct diamond to a 1.00ct diamond, the cutter who loses that 0.01ct trying to make a prettier stone will lose his job.

Perhaps with the nicer cut it will only be worth 15% less instead of 20%, but either way, it’s a big loss.This kind of price manipulation by maintaining weight categories has been taken to an extreme by many of the world’s largest diamond companies.

They will take rough diamonds with diameters that really should have only been used to make a 0.75ct-0.85ct diamond (with the proper cut to maximize brilliance), but instead will keep them over 0.96ct to sell them as 1ct diamonds to the major jewelry chains like Kay or Zales.

Even though they will have to sell these diamonds at steep discounts compared to well cut 1ct diamonds, they are still sold at a significant premium to well made 3/4ct diamonds.

See the chart below for a graphical representation of this price jumping phenomenon.

Diamond Price

Diamond Prices from 0.08ct to 1.00ct

In terms of pricing, there are two basic categories of diamonds — those priced off of the Rapaport diamond price list and those that aren’t.

What is the Rapaport Price List?

According to Wikipedia, Martin Rapaport “began his work in diamonds as a cleaver and rough sorter in Antwerp, Belgium.

He began brokering rough and polished diamonds in New York City in 1975. In 1978, he created the Rapaport Prices List, which some say is not reflective of true prices.

He has since created many businesses relating to the diamond industry, eponymously bearing his name, including an electronic trading network for traders RapNet and IDEX, and diamond-related news in print and web formats.”

Understanding the Rap List 

The Rapaport Diamond Report price list (“Rap List”) is released weekly on Fridays, however it does not necessarily change every week.

It is used as a baseline for pricing for basically all loose diamonds sold as single individual stones (as opposed to diamonds sold in parcels) generally SI3 or better in clarity and K or better in color (although the price list does offer prices for L and lower colors and I1 and lower clarities, they are rarely used in the industry).

Diamond price

Rarely will you see a diamond with an I1 clarity grade sold with a certificate.

Why Jewellers Lose the Certificates

Intelligent companies in the industry never sell GIA certified I1 diamonds because they know they can sell them for more without the certificate (and therefore without using the Rapaport diamond price list as the baseline).

Whenever they receive an I1 clarity grade for a diamond which they had intended to receive an SI2, they will simply throw out the certificate and pretend it didn’t exist.

Learn How to Read the Rapaport Diamond Report

If you click on the image of a sample “Rap List,” you will see four separate grids.  Each one is for a different size category.  The four categories shown on this sample are 0.90-0.99, 1.00-1.49, 1.50-1.99, and 2.00-2.99.

Each grid is a matrix of color against clarity.  To find the “Rap Price” for a given diamond, you need three pieces of information: the size category, the color, and the clarity.

Prices listed are always in hundreds.  Lets say, for example, that you have a 1.55ct H color SI1 clarity diamond.  The “Rap Price” for that diamond would be $7,600 per carat. But finding the Rap Price for your diamond is only the beginning of pricing a diamond.

Discount and Premium Prices

The real art of diamond pricing is figuring out the discount or premium to the Rap Price.  In the vast majority of situations, diamonds trade at a discount to the Rap Price.  It is this figure that two diamond dealers will haggle over.

Lets stick with our 1.55 H color SI1 clarity diamond example.

Those three qualities (color, clarity, and weight) only bring you to the baseline.  Now things become much more subjective.  Factors that might come into play in determining the discount off of the Rap Price might include: Fluorescence, Cut, Inclusion quality, Luster of the diamond material, and Color Quality.

What is “Rap less 20” or “20 Below”?

If that diamond were an excellent cut and the SI1 was a beautiful SI1 that was way off on the side of the diamond and barely visible and the H color really looked like a G, and there was no fluorescence, then the diamond might trade at -20% or even -15% less than the Rap Price (in diamond jargon, this would be called “Rap less 20” or “20 below”).

This is the figure that is argued over.  So while a seller might try to sell this diamond at “Rapp less 15,” a buyer might only wish to buy it for “20 below.”  To calculate the actual price, you need to reduce that percentage from the Rap Price.

In our example, “20 below” $7,600 per carat is $7,600 * (100%-20%), or $7,600 * 0.80, which comes to $6,080.  Then you need to multiply that price by the weight to arrive at the final per diamond price ($6080 * 1.55 = $9,424).

Sweet Spots of Value

Now, take another look at the sample “Rap Sheet” from before. Take a close look.  Notice anything odd?  The differences between adjacent prices in each matrix are very far from being uniform.

For example, the difference between a 1ct G color VS2 clarity diamond and a 1ct H color VS2 clarity diamond is a full $1000.  But the difference between the same G VS2 and a 1 ct F VS2 is only $500!

Don’t ask how this happens.  The diamond business is rarely built on logic or reason.  A skilled diamond dealer, though, can help you navigate these inconsistencies to find the sweet spots of value within this pricing grid.

In our case, for example, it’s clearly not worth it to upgrade from an H color VS2 clarity to a G color VS2 clarity since it costs so unreasonably much to make that upgrade.  And anyway, as I mentioned in the Color article, color upgrades are rarely worth the money.

Color and Clarity

One interesting outcome of the entire business being based on the Rap List is that far too much weight is given to color and clarity in determining price.

Objectively speaking, and G color SI1 clarity that is an ideal cut with a pleasantly laid out inclusion will be a prettier diamond than a G color VS2 clarity with an average cut. And a G SI1 super-ideal stone will be all the more beautiful.

If we continue with this case, lets say for a 1 ct diamond, a G SI1 that was an ideal cut (and everything else was fine), the price would be approximately “25 back,” or $6100*0.75 =  $4575 per carat.  But a G VS2 with an average cut might go for “35 back,” or $7200*0.65 = $4680.

By all accounts, the “25 back” SI1 is a much much prettier diamond than a “35 back” VS2, yet the VS2 is still more expensive.

This is why it is so crucial to have someone helping you along the wayspecifically regarding how to value the different factors that go into pricing a diamond.  If someone knows what they are doing, they can really find tremendous value out there.

Alternatives to the Rap List

Over the years, there have been several attempts to create alternatives to the Rapaport price list in the industry. There is much to criticize about the Rap List.

Nobody knows what his methodology is and Martin Rapaport himself has financial interests in diamonds, so there’s a very clear conflict of interest. One of the most valiant recent efforts to create a new industry pricing standard came from the IDEX company.


Similar to Rapaport, IDEX offers an online B2B industry diamond exchange in addition to publishing industry analysis. Unlike the Rap List, however, their diamond pricing tool, called the IDEX Diamond Price Report, is completely transparent about its methodology.

Their price list has gained the support of some major diamond dealers, but so far it has been met with much resistance in the broader market.

Diamond Retail Benchmark

In addition to the Diamond Price Report, IDEX publishes another consumer focused price list called the Diamond Retail Benchmark. Like the Rap list, the DRB offers a high-level standard price off of which should be applied a “discount” to arrive at the final consumer price.

The list is available here, but without knowing what “discount” should be applied in your specific case, it will be challenging to extract any usable information.

What about diamonds priced without the Rapaport Price List?

Just about all other diamonds that are not certified, and therefore not sold as single diamonds, are sold according to a “parcel price.”  This is a price per carat for the weight of diamonds purchased, irrespective of the number of diamonds selected.

Since there is no list dictating baseline prices, understanding these prices is far more nuanced and therefore requires years of experience to truly understand a parcel’s value.


Diamond Clarity

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Diamond Clarity

It is very common for diamonds to be formed with slight imperfections. These are known as “inclusions” and can come in many forms, including tiny white points, dark dots, or feathers. The fewer inclusions, the more the diamond worth. A diamond’s clarity ranking is determined by the number, size, type and placement of the inclusions.

A stone with only a few hard-to-see pinpricks located near the edge, where they can be covered by the mounting, has better clarity than a stone with a crack located right under the table (the large top facet of the stone). Cracks from the surface to the interior are especially dangerous because the diamond could break if hit the wrong way. On the other hand, small nicks and chips on the surface are often of little concern because they can be polished away.

For the most part, diamonds used in jewelry are clean to the naked eye. In a certified diamond, the cracks are charted on the certificate and act as a fingerprint for identifying a particular stone.

The following is the GIA clarity scale, along with corresponding definitions for different clarity grades, which is very commonly used in the United States:

FL FLAWLESS Free from all inclusions or
blemishes at 10x magnification.
diamond clarity
IF INTERNALLY FLAWLESS No inclusions visible at 10x,
insignificant surface blemishes.
Interally flawless diamond
MINOR INCLUSIONS Difficult to see face-up at 10x. Minor included diamond
NOTICEABLE INCLUSIONS Easy to see at 10x. Noticably included diamond
OBVIOUS INCLUSIONS Easily visible to unaided eye. Obviously included diamond

Learn More about Diamond Clarity

learn how to grade diamonds

learn how to grade diamonds

The GIA created the 4 C’s used in grading diamonds; Cut, Clarity, Color, and Carat Weight. They created the grading color system used to determine the quality of a diamond. They are the largest and most respected institute in Gem grading.



Gain the skills to grade the color, clarity, and cut of diamonds. Using authoritative texts and magnified photos, learn to determine proportions and estimate weight. Study diamond treatments, synthetics, and simulants, and understand the effect of fluorescence on diamond body color. Analyze the role cut plays in the marketplace, and acquire the technical knowledge needed to make profitable buying and selling decisions. Final exam is online, closed book, and proctored; see the Education Catalog for details.