Why are diamonds so valuable? Why are diamonds so expensive? One of the most in-demand stones in the world, diamonds play a huge role in modern culture. Associated with love and romance, these shiny gems are most often found in engagement rings, wedding bands, and other dazzling fine jewelry pieces. But what exactly makes diamonds so valuable and when did they rise in the ranks of popularity?
Join us as we explore where diamonds come from and why they continue to captivate the hearts of people around the world.
Where Do Diamonds Come From?
Diamonds are formed deep beneath the earth’s surface when carbon deposits are subjected to high temperatures and high pressure. Some stones form in a matter of days or months, while others can take up to millions of years to materialize. Most natural stones available on today’s diamond market come from diamond mines in South Africa, Russia, Australia, India, and Canada.
Alternatively, diamonds can also be grown in a lab. Lab diamonds are created by replacing the intense pressure and temperature that a natural diamond is subjected to in a controlled setting. Lab created diamonds are real diamonds. They are made from carbon and contain the same chemical makeup as natural diamonds.
How Are Diamonds Graded?
Diamonds, both mined diamonds and lab grown diamonds, are graded by gemologists according to the 4Cs of diamond quality – cut, color, carat, and clarity. This widely accepted ranking system was implemented by the Gemological Institute of America(GIA) to determine a precious stone’s value. The 4Cs also impact the price of a diamond.
Diamond cut refers to a precious stone’s proportion, polish, and symmetry. Cut can directly impact how well a diamond refracts and reflects white light, some cuts are brilliant and sparkly, others are not.
The GIA ranks diamond color on a scale from D to Z. D represents a perfectly colorless diamond while Z represents stones with an obvious hue. Colorless diamonds or near colorless diamonds are valued much higher than stones at the bottom of the color scale because they are much rarer in nature.
While the term carat is commonly used to describe the size of a stone, this is actually incorrect. In actuality, carat is a measurement of weight.
A diamond’s carat weight will not necessarily impact how big it appears because each diamond shape wears its weight differently. For example, elongated shapes like pear cut diamonds and oval cut diamonds are wider and more flat than other shapes such as the round brilliant cut and Asscher cuts.
Diamond clarity refers to a stone’s visual appearance and internal characteristics. Clarity is graded by diamond experts using a scale that ranges from flawless to included where gemologists search for surface blemishes and inclusions. While many imperfections within a diamond are nearly impossible to spot with the naked eye they can still negatively impact a stone’s value.
Why Are Diamonds So Coveted?
The diamond trade wasn’t always booming. In fact, we can thank De Beers for the worldwide obsession with this precious stone as it all stemmed from a brilliant marketing campaign launched by the company in the 1930s. De Beers proclaimed that diamonds were the ultimate symbol of true love touting the catchphrase, “A Diamond is Forever.” What’s more, the company spent tons of money putting more diamonds in movies and having celebrities such as Marilyn Monroe sing about the gemstones to raise intrigue. The idea caught on sending diamond sales through the roof. Couples have been proposing using diamond engagement rings ever since.
Demand and the Diamond Industry
At the time of the campaign, De Beers controlled around 90 percent of the production of rough diamonds. The company limited the overall supply of diamonds which in turn, drove up the price.
Interestingly, although diamonds are highly desired, they don’t hold much resale value. In fact, the average diamond is only worth 20 to 40 percent of its original price upon trade-in at a local jeweler.
So what gives? An article from Insider says the following, “It’s because the diamond industry is tightly manipulated and marketed so diamond sellers can sell for high prices, but they know what it’s really worth when you try to sell it back. The companies create an artificial demand by limiting the supply of new diamonds, and the lack of supply boosts prices when they sell it, but not necessarily when you sell it. All of this creates the appearance of a product that is hard to obtain and not owned by many, but it’s a fabrication.”
What Is the True Value of a Diamond?
Despite the fact that diamonds aren’t as valuable as we’re led to believe from a monetary standpoint, they still hold sentimental value. The simple fact is that many couples still associate diamonds with love and want to propose with a diamond engagement ring.
However, factors like diamond price and ethical concerns are beginning to take their toll on modern consumers. Some people simply cannot afford the steep price tag associated with gem-quality diamonds and others are put off by the revelation of blood diamonds and environmental destruction associated with mining companies. People are more aware of why natural diamonds are unethical and where they actually come from. Apprehensive shoppers are instead turning to “conflict-free” diamonds or opting to ditch natural diamonds completely, choosing either lab grown diamonds or synthetic diamonds instead. With the rise of vintage styles, heirloom and antique pieces are also growing in popularity as shoppers search for diamond alternatives.