A diamond's cost is based on the characteristics known as the "4 C's".
The four characteristics are carat,
clarity, color, and cut. Wholesale market can use the four C's of a diamond to establish an expected price range. More
detailed information from within each characteristic can be used to determine
actual market value for individual stones.
Carat is the unit of weight for the diamond. One
carat is defined as exactly 200 milligrams (about 0.007 ounce). The point
unit--equal to one one-hundredth of a carat (0.01 carat, or 2 mg)--is commonly
used for diamonds of less than one carat. Value per carat increases exponentially in relation to carat weight, because larger rough diamonds occur less frequently.
Clarity describes the clearness or purity of a diamond. Internal defects of a diamond are called
inclusions. Inclusions may be crystals of a foreign material or another
diamond crystal, or structural imperfections such as tiny cracks that can
appear whitish or cloudy. The number, size, color, relative location,
orientation, and visibility of inclusions can all affect the relative clarity
of a diamond. Diamonds become increasingly rare when considering higher clarity
Color describes the amount of color the diamond contains. A chemically pure and structurally perfect diamond is
perfectly transparent with no color. However, in reality almost
no gem-sized natural diamonds are absolutely perfect. The color of a diamond
may be affected by chemical impurities and/or structural defects in the crystal
lattice. Depending on the hue and intensity of a diamond's coloration, a
diamond's color can either detract from or enhance its value. For example, most
white diamonds are discounted in price as more yellow hue is detectable, while
intense pink or blue diamonds (such as the Hope Diamond) can be dramatically
Cut ensures that a given stone has maximum brilliance and sparkle which would not be the case were the stone cut for weight alone. The cut of a diamond describes
the manner in which a diamond has been shaped and polished from its beginning
form as a rough stone to its final gem proportions. The cut of a diamond
describes the quality of workmanship and the angles to which a diamond is cut.