Diamond Size: How much does carat weight influence the price of a diamond?

The first factor of the 4 Cs that most people learn is carat weight, which is the best indication of a diamond's size. Let's take a minute to cover carat weights in detail to understand how it effects the price.

Carats
Diamond weights are measured in "carats." One carat equals 1/142nd of an ounce, or 1/5th of a gram. In other words... there are 142 carats in 1 ounce and 5 carats in 1 gram. The word "carat" comes from the ancient practice in India (where diamonds were first discovered and traded) of measuring diamond weights with the one thing in nature that is both small and the most consistent in weight -- the carob seed. Thus the name "carat" evolved in the English language, which is still equivalent to approximately the weight of one carob bean.

Points
You also may have heard jewelers talking about "points" when discussing diamond sizes. This does not refer to the number facets on a diamond, but rather to its weight. Just like one pound is divided into 16 ounces, one carat is divided into 100 points -- so each point is 1/100th of a carat. A "10-point" diamond weighs 1/10th of a carat, and a 50-point stone weighs one-half carat.

Price
Carat weight has a great deal of influence on the price of a diamond -- more so than one might imagine at first. Since larger stones are more rare in nature, they are more expensive as well. For instance, one diamond weighing 2 carats will always cost much more than two diamonds of the same quality weighing 1 carat each. Below is an approximate comparison of the major diamond weights to act as a starting point in your consideration.

Diamond Sizes
IMPORTANT: Monitors vary widely. Hold an actual dime over the picture of one below. If the dime below is actual size, then the diamond sizes in this chart are accurate for your monitor.

WARNING: Knowing the 4 Cs is NOT enough to price a diamond accurately. At least 13 factors affect diamond value, including fluorescence, table percentage, symmetry and other crucial details. To find a price on any diamond, use our Diamond Price Tutorial Page, which teaches you how to use online diamond databases to calculate what to pay for any diamond. If you cannot find a good jeweler, we rate the top dealers for you.

Robert Hensley President Diamond Helpers

Today, I am writing this article especially for people who are looking forward to investing in jewelry and are stuck between buying gold or diamond. This is my personal experience which I am sharing with you but the below listed price and percentages are for informational purposes and not the real ones. So if you are going to invest in jewelry, I would recommend you to invest in gold instead of diamonds as diamonds resale value is always less than gold. Now read how.

No Returns of Investing in Diamond - Rather Depreciation

For example, you purchased a diamond necklace for 3000 dollars two years back and you go to the same diamond jeweler for exchange for getting a new one. The jeweler will simply deduct the 10% for labor charges and wear and tear from original bill at the time of purchase. Also, diamonds can be studded only in 18ct gold which is 75% less than 24ct or 22ct, both are used for making pure yellow gold jewelry. Also, if you are having more diamonds and less gold in your necklace, expect a 5% to 10% depreciation on old diamonds. Now what happens is that the diamond jeweler will straight away deduct up to 20% from your original purchase and you will be getting in hand only 80% that is

around 2400 dollars. Now for buying another diamond necklace of the same size and quality, you have to invest another 600 dollars, so there is a depreciation of 600 dollars and no returns of investment.

High Returns of Investing in Gold

Now lets take an example of your yellow gold necklace. You purchased the same at 3000 dollars two years back and at that time the rate of 10 gm of gold was 300 dollars and now it is around 400 dollars, then you will visit your jeweler, he/she will deduct 10% for labor charges and wear and tear from original bill at the time of purchase and will give you 90% according to the present gold rate which will be around 4000 dollars minus 10% (400 dollars) and you will be getting 3600 dollars. Now what you got here, you got an increment of 600 dollars in two years on your gold necklace.

Now what do you think is a better investment option, gold or diamond?

Would you go for 600 dollar depreciation in two years on your diamond necklace or 600 dollar increment in your gold necklace in two years? Yes, I know you want to take the gold route and thats why every smart jewelry investor has been doing.

Buy a Gold Bar Online (2.5 gm and 5 gm) Also Turn Yellow Gold Look Like a Diamond without Buying a Diamond
For women fond of diamonds and wanting to invest in gold at the same time, the option is turning their yellow gold look like a diamond and that can be done by simply getting rhodium plating on yellow gold done by your jeweler. Rhodium can be electroplated on gold jewelry. It looks like white and bright chrome plating. You can view the rhodium polish on yellow gold pics on the side. For your information, rhodium is very expensive metal and is around 10 times the cost of gold, but it is plated so thin on your jewelry that the price is not a big deal. Rhodium plating is not so expensive and saves you hundreds of dollars on your investment plus enhances the appearance of your gold jewelry by giving it a diamond-like glitter and truly shiny look. So go ahead and invest in gold and get the rhodium polish done on it if you want a diamond-like look.

Gold TO HIT $5000.00 By 2012? Dollar Never RECOVERS?

Diamonds vs Gold
June 03, 2009 Premise De Beers and other major players in the diamond industry are now supporting the concept of diamonds as an investment alternative to Gold. This prompts the following questions: - Why is this relevant now? - What are the investment merits of diamonds? - How do Diamonds compare to Gold? Discussion Effect of current economic climate The onset of a global recession has surfaced after a record period of growth. Many investors have lost confidence in paper stocks and are now seeking a flight to quality. Traditionally during these periods commodities such as gold and silver are seen as a popular investment, as company stocks can lose their total value whilst commodities retain their intrinsic value. Commodity prices have followed this pattern with precious metals and oil all reaching record highs in 2008. General commodities have sharply fallen in price since the economic downturn except the precious metals which are still trading close to their record highs. The emergence of both China and India's growing economies has played a particularly significant role. Firstly they were partly responsible for keeping commodity prices on highs due to the perception of continuing growth, but also it is generally the eastern investor who values intrinsic worth and many private individuals hold large hard asset portfolios. Perhaps the most significant consequence of this new economic climate is that real money has become scarce and interest on borrowed money has risen as a consequence. Therefore, industries reliant on credit, including the common practice of dealing goods on memo within the polished diamond industry, has been negatively affected and new investment and credit streams are needed to fill the inevitable void caused by this economic upheaval. The credit crunch has affected all areas of the world in an increasingly globalised economy. As a result, risk management has come to the fore more than ever and investors are increasingly seeking de-correlated assets to reduce overall portfolio risk. Asset allocation strategies for 2009 exhibit far greater degree of diversification and in particular a shift away from paper securities to hard assets and commodities that will always retain some intrinsic worth. Why diamonds are a hard asset class and how they compare to gold? The traditional hard asset classes are gold, silver and other precious metals. Diamonds too are a hard asset class, but one which has only partially been realised. Diamonds exhibit a number of similarities to gold as an asset class. The primary use for both gold and diamonds is for jewellery. Demand for gold as jewellery absorbs around 75% of the gold supplied to the market each year. Industrial applications of gold account for approximately 10% and the balance is

made up by investment. Currently diamonds are seen as a luxury item primarily for jewellery and the percentage of investment is relatively small, but the fundamentals point to an increasing opportunity for this to rise significantly. The major significant use of gold today is for investment, that is, as a currency or a store of value. This includes jewellery and the fundamental purpose of gold jewellery is to store something valuable in your personal safekeeping. Gold has some non-investment industrial uses, such as in electronics, but the amount of gold used in these ways is relatively small. With all its practical uselessness gold has one serious utility: reliable rarity. And that is what ordinary savers look for when they want to store future purchasing power. Gold provides a tangible asset to hold in uncertain economic environments. It is effectively a currency which acts as a safe haven and is often used as a portfolio diversifier. With a falling dollar, a falling economy, or high unemployment gold can offer investors security and a hedge against inflation. It is also a useful barometer to measure the global economy. These are just some of the reasons people invest in gold and they are not likely to change. Due to the current global economy being in the midst of a deep recession investing in hard assets offers a measure of support for investment portfolios. A weak US dollar produces a strong gold price which has been proven over the years. This has not yet been realised for diamonds. There will always be a demand for gold. There always has been. Similarly, diamonds have a continued demand and many of the fundamental benefits gold offers as an investment can be applied to diamonds. Diamonds are the most concentrated store of value that exists. They are tangible, portable and liquid investments. Investors can use diamonds without decreasing their value and they pay no property tax on their investment. Additionally, todays global currencies are known as fiat currencies by investors, which means they do not represent anything tangible but are only worth something due to government decree (namely legal tender laws). As Voltaire famously said in 1729, Paper money eventually returns to its intrinsic value - ZERO. The value of gold and diamonds, on the other hand, is independent of any government laws. Unlike fiat currencies, gold and diamonds are accepted as valuable without needing protection by laws. Both are extremely rare mined natural resources, with diamonds in fact being significantly rarer than gold. Both are also US $ denominated assets (over 60% of gold holdings are still in US$) and diamonds are already used as a currency hedge in a similar manner to gold by HNWIs in Russia and India. Diamond prices have in fact steadily appreciated over the last 25 years, but despite this price increase diamonds now look historically cheap against most other asset classes. Supply and Demand Whilst there has been a clear fall in diamond prices over the last two quarters, there is a well documented expected supply deficit in the medium to long term future. The demand / supply

equation looks increasingly favourable from an investment perspective in the future. Supply levels are globally expected to fall in 2009 as mining companies react to the impact of the credit crisis freezing elements of the supply chain, coupled with the price correction seen at the end of 2008 and beginning of 2009. De Beers and Alrosa have already stated their intentions to reduce production and restructure their businesses. A global lack of exploration discoveries means that the medium term supply has little capacity to increase beyond 2008 levels in the near future. There is a long lead time - averaging 8 years for mine development, and this absence of major new discoveries leads to a structural supply constraint across the industry which is displayed with ageing mines, a move to underground mining, increasing costs and the lack of new large scale mining developments. Furthermore, there are significant barriers to entry for potential new entrants to the diamond mining industry with huge exploration costs and the long lead time for new mines. There is a proven continuous and steady historical growth rate in demand for polished diamonds, even in economic downturns. The US retail market still accounts for over half of all polished diamond consumption, with Japan the second largest followed by Europe. Recent years have seen emerging market demand for diamonds, primarily from the BRIC countries and the Middle East, grow significantly. Emerging market demand is forecast to continue to grow over thye next decade driving the supply deficit further. Price Performance Polished prices are currently trading around levels seen in 2004/5. Historical price performance of polished diamonds since 1982 is strong relative to gold, yet in the last 10 years it has lagged behind gold and other commodities. With supply cut by the major mining companies some level of price support is filtering through to the polished market as inventories are run down and demand stabilises. Coupled with increasing investment demand and also demand growth from China prices stabilised in mid April and have shown marginal increases in some categories.