Weight is the main deciding factor of pricing a diamond. Did you know that more than 90% of the diamonds are cut to maximize weight instead of optical performance? The simple reason boils down to economics and profitability for the businesses.
That’s the ugly truth in today’s market.
Polishing a stone to a smaller weight in order to achieve a better cut would mean that more weight is taken off the rough stone. Often, the choices that a cutter undertake to create a diamond with ideal proportions or to create a diamond that can sell for more money is pretty clear cut (pun-intended).
As a direct result of this, you can see easily observe that the bulk of larger rough diamonds are intentionally not cut with ideal standards. The fundamental reason is due to the fact that the bigger stones are very much rarer in nature and cutting decisions are largely driven by market forces.
While a diamond with a larger carat weight sounds better on paper and helps you “show off” your status in society, it isn’t always about size. The carat weight of a diamond alone cannot be used as a fair reflection of its beauty in terms of sparkle and brilliance. Think about this. What good is it to be wearing an insanely huge diamond ring when the stone itself resembles a frozen piece of spit?
The prices of diamonds do not rise linearly with their quality and size. Instead, prices have an exponential relationship with the carat sizes. For example, if a one carat diamond that is worth $7500, that doesn’t mean that a two carat diamond would be worth $15,000. In fact, a two carat stone would cost significantly more than the sum of two individual one carat stones.
In contrast, two pieces of gold each weighing one kilogram is worth just as much as a single piece of gold weighing two kilograms. Diamonds, unlike gold, cannot be melted and shaped into any desired size and form.
Also, smaller roughs pop up more often during the mining process compared to roughs weighing hundreds of carats. For that reason, as the weight of the rough stone increases, their “price per carat” value rises exponentially.
Using a price list from JamesAllen.com as an example to illustrate this phenomenon, you can see that prices jump at every 0.25 carats in a non-linear fashion.
Bear in mind that the biggest price jumps occur at the half and full carat levels. If you are wondering why so many diamonds in the market are cut to exactly 1.00 carats or hitting the 0.50 mark accurately, here’s your answer.
Due to this pricing system, it also means that it is cheaper to buy a jewelry item that consists of multiple smaller stones instead of a single large diamond. If you are on a limited budget, this could be a good option to explore since each separate stone is priced individually rather than as a whole.