For first-time buyers, the following quick diamond budget scenarios can be a valuable cheat sheet for budget allocation within a given range.

Building on our framework of prioritizing the 4Cs, the table below illustrates three options for a buyer within a given budget. Option 1 shows the types of diamonds a shopper would buy based on the highest quality; Option 2 highlights diamonds for both quality and optimal value; and Option 3 shows diamonds with the biggest carat weight and acceptable quality within a given budget.

Note: avoid fluorescence in high color grades and prioritize cut.

Considering the economic downturn and additional pressure from lab-grown diamonds, 1 carat natural diamonds in the SI/VS range below G color might be traded 5-10% below the chart prices. However, we believe this is a temporary demand-related issue, and we urge diamond buyers to take advantage of this opportunity if they are in the market for a diamond.

1.5 carat diamonds are highly in demand among individuals shopping for a good quality diamond with an average budget. Aim for a well-cut G or above color and VS2 clarity diamond with no fluorescence in this range. However, individuals with a tight budget can consider the H or I range with medium blue fluorescence.

Two carat diamonds of premium quality are rare and their prices tend to be high for an average budget range. When shopping for a diamond in this range, aim to buy a high-quality diamond that will preserve its value over the long term.

Diamonds in the 3 carat and above range are extremely rare, especially gem-quality ones. As such, for the best value, buy a well-cut, premium-grade stone in this range.

Diamonds are among the most valuable gemstones, making it essential to understand how their prices are determined, who sets them, and why seemingly identical diamonds may vary in price. Insights on these factors will set informed buyers apart from everyone else.

While there is no exact formula for diamond pricing, the provided charts offer approximate values based on diamond quality. Each stone, being unique, must be evaluated individually. Key factors influencing price include the traditional 4Cs, fluorescence, certification, visual appeal, and whether the diamond is purchased online or locally.

Any price below our conservative benchmarks represents a bargain. Acquiring a diamond with excellent cut, GIA certification, and no fluorescence at such prices is considered an exceptional deal in today's market.

The price discounts below are recommended for fancy shape diamonds off round diamond prices highlighted in the above charts.

Round cut diamonds are typically priced higher than fancy cut because cutting a round cut requires a larger rough stone.

• Oval cut diamonds are priced 2 to 10% lower than round diamonds.
• Princess cut diamonds are priced 14 to 24% lower than round diamonds.
• Cushion cut diamonds are priced 15 to 25% lower than round diamonds.
• Radiant cut diamonds are priced 16 to 25% lower than round diamonds.
• Emerald cut diamonds are priced 17 to 26% lower than round diamonds.
• Pear cut diamonds are priced 5 to 10% lower than round diamonds.
• Marquise cut diamonds are priced 15 to 22% lower than round diamonds.
• Asscher cut diamonds are priced 15 to 25% lower than round diamonds.

The interplay of demand, supply, and surplus inventory on a global scale also significantly influences these pricing dynamics for each distinct diamond shape.

To make an informed decision and secure the best value, consider the following seven factors that primarily influence a diamond's price.

While all diamond buyers encounter the 4Cs—carat weight, cut, color, and clarity— understanding the subdivisions and nuanced variations within these factors, which many dealers do not fully explain, is essential. Even Rapaport’s price report does not cover these intricacies.

Pro Tip: Budget-conscious buyers should prioritize cut quality and choose diamonds with imperceptible differences in color and clarity. A diamond that looks clean and colorless to the naked eye can offer a good balance between aesthetics and cost.

The 4Cs

Carat Weight
Carat weight significantly affects price, with larger diamonds being rarer and more expensive. Prices increase noticeably at half-carat and full-carat increments. Opting for a slightly lower carat weight, such as 0.9 instead of 1.0 carat, can save money while maintaining a large appearance.

Price Per Carat
Price per carat escalates as carat weight and quality increase. For example, a one carat diamond priced at $3,500 makes a 0.5-carat diamond cost $1,250. When comparing diamonds, consider the other 3Cs (color, clarity, and cut), as well as shape, since these factors also affect pricing.

Cut
The cut is the most important factor, influencing a diamond's brilliance and beauty. A well-cut diamond can hide inclusions and mask undesirable colors, enhancing the stone's visual appeal. The cut refers to symmetry, proportion, and polish and directly affects how light reflects within the diamond. Prioritize an excellent cut, as it can make a diamond look larger and more vibrant.

Color
Diamond color ranges from D (colorless) to Z (noticeably yellow or brown). While colorless diamonds are rare and expensive, slight color differences can be hard to detect. A G color diamond paired with an excellent cut often provides the best value.

Clarity
Clarity measures a diamond’s internal and surface flaws. Most diamonds have imperfections, but their visibility and placement matter most. A VS2 clarity grade balances price and eye cleanliness and is often indistinguishable from higher grades like VVS or flawless diamonds to the naked eye.

Additional Factors
Beyond the 4Cs, consider:

Certification
A grading report from reputable certification labs like GIA or AGS is essential. These labs ensure consistent and accurate grading, giving buyers confidence in the diamond’s quality.

Physical Appearance
While certification is crucial, a diamond’s in-person appearance can vary despite having identical grades. Visual factors such as tints, inclusions, or haziness may impact value.

Shape
Round diamonds are the most expensive due to their popularity and brilliance. Shapes like oval, princess, pear, or emerald are more affordable, offering savings of up to 20% compared to round diamonds.

Fluorescence
Fluorescence, visible under UV light, affects a diamond's value. While strong fluorescence in colorless diamonds may reduce the value, blue fluorescence can enhance lower color grades, making it a budget-friendly choice for H to J-grade diamonds.

By understanding these factors, buyers can make more informed choices and secure the best value for their diamond purchase.

For additional reference, check GIA's article on diamond quality factors.

The market for uncut rough diamonds differs significantly from that of polished diamonds. Major players like De Beers, ALROSA, and Rio Tinto manage the supply of rough stones to maintain price stability. This careful control influences the pricing of polished diamonds.

Engagement in the rough diamond trade requires compliance with the Kimberly Process, which prevents the trade of conflict diamonds. While De Beers no longer controls the majority of the market—down from 85% to around 25-35%—its influence on pricing remains significant.

De Beers' "Sight Holders," a group of select diamond dealers, are pivotal in distributing diamonds. De Beers holds ten annual "sights," where these dealers can purchase assortments of rough diamonds valued between $1 million and $25 million. Being a De Beers Sight Holder is a prestigious position in the diamond trade.

Polished diamonds are priced either by referencing the Rapaport Price List or through independent means. The Rapaport Diamond Report is a key pricing tool in the industry, issued weekly by Martin Rapaport and his team. It factors in carat weight, color, and clarity—three of the four fundamental diamond characteristics (the 4Cs). The report primarily reflects market demand rather than production costs and is a primary reference for traders, especially for round diamonds. Not all traders strictly follow Rapaport prices, but they serve as a high-end benchmark.

2015 Sample Rapaport Price Chart (educational purposes)

RapNet Price List and Trading Network

RapNet, powered by Rapaport, is the world’s largest jewelry trading network. Its platform, available to premium members for an annual fee of $699, allows for direct interaction between buyers and sellers without trading fees or commissions. The RapNet Asking Price List displays the actual asking prices for diamonds based on cut quality and GIA certification. These prices reflect real market transactions and may include discounts or premiums relative to the Rapaport Price List.

Differences Between RapNet and Rapaport Price Lists

While the Rapaport Price List sets a high cash asking price, the RapNet Asking Price List details the actual prices sellers seek for diamonds. RapNet covers various diamond shapes and market discounts or premiums, while the Rapaport list mainly focuses on round diamonds.

2015 Sample of RapNet Best Average Asking Price (educational purposes)

Pricing Variations and Discounts

One common practice in the industry is applying discounts to the Rapaport price, often referred to as the “20 Below” or “20 Back” rule. This means negotiating for diamonds at a price 15-20% below the Rap price based on factors like cut quality, fluorescence, and inclusions. These discounts account for subjective factors beyond the 4Cs, such as a diamond’s brilliance or visual imperfections.

Sweet Spots of Value

Prices between diamonds of adjacent grades often vary unevenly, influenced by both market logic and emotional appeal. For example, upgrading from a VS2 clarity, H color diamond to a G color diamond may result in price differences of hundreds or even thousands of dollars. Expert guidance from dealers helps buyers identify optimal value when navigating the price grids.

Rapaport’s Role in Pricing Stability

Before Rapaport introduced its pricing system, diamond valuation was inconsistent. Over time, the industry has increasingly aligned with Rap prices, bringing more stability and transparency to diamond transactions.

Constraints of the Rapaport Price System

While Rapaport pricing focuses on color, clarity, and carat, it overlooks other important attributes like polish, symmetry, and visual appeal. Two diamonds with the same GIA grade may vary significantly in price depending on subjective visual qualities such as fluorescence or internal imperfections, highlighting the system's limitations in assessing a diamond's true market value.

In essence, the pricing of polished diamonds is a complex blend of objective standards and subjective factors, making negotiation and expert insight crucial.

In 2023 and 2024, diamond prices declined significantly, largely due to economic downturns and the rising popularity of lab-grown diamonds. However, this decline is considered temporary, presenting an opportunity for buyers. Meanwhile, prices for investment-grade diamonds (colorless and flawless) have remained relatively stable due to their scarcity and enduring demand.

While general diamond prices have faced short-term fluctuations, high-quality, investment-grade diamonds are less affected by market shifts and maintain their value amid changing economic conditions.

With the global economy experiencing growth, the demand for luxury goods, including diamonds, is expected to rise. Simultaneously, diamond mining has decreased, which might lead to higher diamond prices in the future.

Impact of Retail Markups

A jeweler's markup significantly influences the pricing of diamonds, which can substantially differ from one store to another for a diamond of similar quality.

The divergence in online and physical store prices can be attributed to lower overhead costs. Opting to shop online is often advisable, potentially leading to savings of up to 50% compared to local jewelry stores.

Recognizing that certain online retailers provide superior selection and pricing without compromising quality becomes crucial. For reference, check our list of places to buy diamonds.

• De Beers will lower rough diamond prices by 10-15% in the latest quarter, Bloomberg. 
• Diamond industry is at inflection point, McKinsey & Company.
• Diamond miners struggle amid weak prices, Mining.
• Al Rosa may reduce mining in 2025, Israel Diamond Industry.
• Can natural diamonds recover, Financial Times.

Calculating diamond prices is a complex process that demands extensive market knowledge and expertise in evaluating diamond quality. While we have sought to simplify this process for everyday buyers, it is important to recognize that no single formula can universally apply to all diamonds due to their unique natural characteristics. Buyers should also consider the seven key quality factors outlined in this guide to make informed decisions when purchasing a diamond, ensuring they receive the best value for their investment.