Gift Ideas Blog

We all know that lovely diamonds are among the most valuable minerals on earth. But how do such tiny stones get to be so very expensive?

Actually diamonds are a commodity like any other: The cost of diamonds depends on the same factors as anything else: The cost of materials, labor, production, distribution and retailing are figured into the pricing of everything from bread to diamonds.

Here is how it works in the diamond and jewelry trade: Diamonds are found in mines around the world. The diamonds are dug out of ore and separated according to size and quality. Each category is sent to diamond cutters who make turn the rough stone into brilliant gems. Of course, the diamonds are highly protected at every step along the way to make sure none of them get lost to less-than-honest employees.

Once the diamonds are cut, they are graded according to the familiar Cs: color, cut, clarity and carat. Color refers to how white the diamond is. Cut refers to how well the diamond was cut to enhance its other qualities. Clarity refers to how cloudy the stone is and carat is the measure of its size. These four Cs determine how valuable and rare a diamond is; therefore watch the four Cs when you want to know why a diamond’s price is set at a certain value.

This grading is done by members of an independent grading company. While there are many of these, the best are members of the Gemological Institute of America (GIA). This internationally recognized organization backs the evaluations of its members by issuing certificates for each stone. When you buy a diamond, be sure to get its GIA certificate to be sure you are getting what you paid for.

Of course, the next step in the process is distribution. The graded diamonds are sent to wholesalers and brokers all over the world who in turn sell the gems to jewelers. The jewelers use the stones in the magnificent jewelry valued by us all.

As you can see, a lot of effort goes into the creation of a single diamond piece, be it a simple ring or an elaborate necklace. Each person involved in each process puts a lot of care and effort in doing their job. And, since everyone works in order to earn money, each person gets a share of the price of each stone.

Unlike many other commodities, diamond prices never seem to fall. While gold and stocks have their ups and downs, diamonds hold their value. So while you may think you are giving your loved one a beautiful piece, you are also giving him or her a great investment that should last for generations to come. Remember that if you ever think diamond prices are too high.