How to Price a Diamond Ring

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A diamond's value is measured using four characteristics: cut, color, clarity and carat weight. The cut describes its angles and finish, and gives the diamond its brilliance -- it should not be confused with its shape, such as round. Color is ranked beginning with the letter "D," which is defined as colorless. Clarity starts at "F" or flawless and the carat weight describes the stone's size. The most valuable diamond is not necessarily the largest, but the best mix of each trait; a large, colorless -- or colorful -- stone that's flawless and well-cut can be worth millions of dollars.

Review the diamond's certificate. Many jewelers opt to purchase stones that have GIA or AGS certificates. This certificate describes the stone's unique characteristics and will include its carat weight, as well as cut, color and clarity rankings. While many stones are sold without these certificates, it can be difficult to know what you're getting if you're not sure how to assess a stone's quality. Knowing these specs in advance makes pricing a diamond much simpler; The Diamond Buying Guide provides an updated list of diamond prices based on a variety of stone sizes, colors, clarities and cuts.

Examine the stone's cut in natural light. The cut contributes the most to a stone's brilliance, a highly desired quality. "Ideal," "fine" and "premium" cuts reflect the most light out of the top of the stone, called the table, and add several hundred dollars to the price of a one-carat stone with similar color and clarity characteristics. If you don't have a certificate, be aware that a stone that's too shallowly or too deeply cut reflects light through the stone's side or bottom, and lessens its brilliance. Since every stone looks brilliant in fluorescent lighting, examine the stone outside, in natural light. If it's still brilliant, the cut is at least adequate.

Compare the stone's color against two different stones. Ideally, the comparison should be against higher and lower quality stones that are the same size, cut and clarity. Round stones, traditionally the most valuable, show a tremendous difference in price between color rankings. For example, according to The Diamond Buying Guide, in July 2011 an H-color, very slightly occluded, one carat, ideal cut round diamond sells for $5,899, while a similar stone with a G color sells for $7,308, a difference of roughly $1,400. However, the average viewer holding these stones next to each other may not notice any difference. A D color -- or colorless -- stone, the most desired diamond color trait -- is priced at $17,716. The viewer will be able to tell the difference easily between a G or H color and a D color.

Examine the stone under a loupe. The jeweler's loupe magnifies the stone 10 times and enables the viewer to observe the stone's flaws; most stones have flaws. Clarity is often considered the least important trait, depending on the stone's shape. Flaws, called occlusions, aren't usually visible to the naked eye. Unless the stone is an emerald-shape, the clarity does not affect appearance or brilliance. As a result, excellent values can be found if you're interested in purchasing a large stone that's 2 carats or beyond. Sacrificing clarity for color and cut can reduce the diamond's price by several thousand dollars. For example, a three-carat round stone with a very good cut and similar color can vary in price by as much as $10,000.

Follow your heart. It's easy to get mired down in the details of a diamond's characteristics, but remember that this, above all, is a labor of love and a matter of personal choice. While the rule of thumb is to spend two months' salary on the diamond purchase -- for an engagement ring -- know your budget in advance, and don't be afraid to ask for the jeweler's guidance. Visiting several wholesalers, such as those located in New York City's diamond district, will show you that prices between stores won't vary much. Deciding in advance what quality is the most important to you -- size versus color, for example -- will help determine where you want to spend your diamond dollars.