Gemstone Pricing Factors
The 4 (or 5) C plus S&D
There are a number of factors which influence
the pricing of gemstones. These are normally called the "4 Cs",
but I like to call it the "5 C plus S&D". Most of these
factors effect both faceted and cab gemstones. This is a long
and in some cases a slightly technical discussion. You might
want to download it and read it later.
I will discuss each of these factors below.
Gemstones are normally measured in carats which is a unit of
weight. The International or Metric Carat is the current unit.
This unit is equal to 0.200 grams (exactly) or in other words
there are exactly 5 carats per gram. There are about 28.5 grams per
ounce which means there are about 142.5 carats per ounce.
The carats (weight) is one of the most important factor in the
pricing of gemstones, especially the more expensive ones.
While it is obvious that a 3 carat gemstone of a specific type
will be more valuable than a 1 carat gemstone, the question is
by how much. All other factors being equal, the larger gemstone
will cost at least three times the smaller. Going to
our S&D (supply and demand), for some gemstones the supply of
3 carat gems is much less 1/3 of that of a 1 carat gem. Tsavorite
(which is a green garnet) has a number of examples in the 1 carat
size, but a 3 carat tsavorite is very rare. If we pick
a price of $200 for a 1 carat tsavorite, a 3 carat tsavorite
(if you could find one) would sell for more than $3000-$4000.
One other factor of the S&D is the demand side. At least for
the smaller sizes, the even carat ranges are in higher demand.
A 2.01 carat diamond is rather more in demand than a 1.99 carat
diamond. You say in one case that your diamond is larger than
2 carats which is more impressive than saying it is almost
2 carats. Because it is so important in pricing, for expensive
types of gemstones (like emeralds and rubies, for example)
flaws in the other factors of pricing are accepted to get the
highest weight.
Opal cabs are usually priced by the carat. We think that this is
not a proper way to price opals, but have to use weight because
everyone does. In the case of the rare opals, only a thin "fire
zone" usually exists. The bulk of the weight is taken up by
the none fire portion of the gemstone. It would be better if
opals were priced by the area and depth of the "fire zone."
Internal flaws in a gemstone effect the clarity of the
gemstone. Cloudy spots, dark spots, light spots, etc. will
alter the sparkle of a transparent (faceted) gemstone. Surface
imperfections are really the same factors for cab gemstones and
these also are important. Unlike a weight, the
factor of clarity is not as easy to determine. Clarity ranges
from gemstones which appear perfect under a 10X magnifier (called
flawless) to
those which show a major number of flaws to the unaided eye. In
between are gemstones that are called "eye clean" which we usually
call "flawless to the eye". The more expensive the gemstone type, the more
clarity faults or flaws are acceptable. An emerald with flaws
visible to the unaided eye is acceptable; a garnet with such
flaws might not be. As far as supply and demand, the demand
for expensive gemstones (such as emeralds) is in excess of
the supply of flawless gemstones.
Color is a factor which is difficult to determine for many
gemstones. For diamonds, there is an accepted standard of
color. For other gemstones, there is a range of opinions. All
colorless gemstones such as silver topaz or diamonds, should be
as colorless as possible. Gemstones with color should have
that color as rich as possible. A light amethyst or aquamarine
is worth much less than one with deeper colors. Going back to
the "S&D", the supply of light colored amethysts might exceed
the demand. Dark amethysts are always in demand. In almost all
cases of
faceted, colored gemstones, the color should be as deep as
possible without being opaque. In almost all cases there is a
range of rich colors. Red garnets may be ruby red, blood red, crimson,
or raspberry purple red. While the raspberry red is considered
the most valuable, your opinion of what you like is as important
as anyone's opinion. With sapphires the most valuable color
is a clear blue with no blue-green tint.
Cab gemstones also have a color factor. Because only the surface
shows on cabs, either a range of colors or a good solid color
(depending on the gemstone) and a high polish or luster
are the sought after qualities.
With opals multi-color "fire"
is more valuable than one color. Depending on the culture of
the buyer, the red color may be more important than blue or just
the opposite. Small patches of "fire" (called harlequin) or
small sparks of "fire" (called pinfire) are usually considered
more valuable than broad patches (called "flicker fire"). I
personally like "flicker fire", but that is just me.
The term cut in gemstones means how the gemsmith has processed
the raw gemstone to make a finished product out of it. With
faceted gemstones there are a number of different cuts.
Diamond (round), emerald (rectangle with cut off edges), oval,
pear, and marquise are the most common. There are hundreds of
other cuts which have been used. The diamond (round) cut tends
to show off the brillance and sparkle of the gemstone. The
emerald cut and fancy cut ovals the color. For faceted cuts
the important factor is uniform, well polished facets that are
made at the proper angles. For very valuable gemstones like
diamonds, a perfect facet series is often passed over to
maintain as high a weight as possible. It is difficult to give
an exact method to determine if the cut is good. In general
except for the few cuts that are not uniform on both sides (like a heart
cut), facets on opposite sides of the gemstone should be the
same size and shape. There should be no chips or unpolished
facets.
With cabbed gemstones the cut should be a uniform dome that
is highest in the exact center. No cracks should show. All
cabs should show a proper sheen or luster and have a high polish.
Most experts would consider the choice made by the gemsmith as
part of cut. I separate it because some of the aspects are not
obvious. The cutter must often decide to make one big, slightly
flawed gem or 2 more perfect ones. In the case of some gemstones,
patterns on the surface (for cabs) or within the gemstone (for
rutilated quartz for example) make all the difference. A
Landscape Jasper or an Azurite-Malachite cab would be just
ordinary with most choices. An
excellent choice of where to cut makes all the difference. With
opals choice is almost everything. Choices made determine the
end result and this aspect of gemstones cannot be done by
automated machines and mass produced.
But all of these complicated factors at the end come down to
supply and demand. The price of everything you can buy is a
result of these factors. A few aspects of this S&D are not at
all obvious for gemstones. The supply of diamonds and opals is
controlled to prevent the supply exceeding the demand at any
time. This is an artificial way to maintain a level or rising
price. All of us have heard that "a diamond is forever."
That is a quote from those who control the supply.
If a gemstone is very rare is it valuable? Of course the answer
to this is yes. But how valuable? It may be difficult
to understand this, but something may be too rare. With
any item that is sought after for itself rather than to
survive, the demand must be built up. You need food and water
to live, but you do not need gemstones, rare coins, etc. One
example of a supply-demand problem is the green garnet called
Tsavorite. At one time it was a very rare curious unknown
stone. Then the people at Tiffany decided it would sell. The
supply was build up by improving the mines and the gemstone
was advertised. It caught on and was very popular especially in
the 1980's.
A family of gemstones is known as beryls. There is a red beryl
called Bixbite. It is found in only 3 places in the world and
only one mine in Utah has ever produced any gem quality bixbite.
At that mine they find 1 or 2 crystals per day. About 25% of
these or less are really of gem quality. It is estimated that
bixbite is about 1 million times as rare as the deep green
beryl that is commonly called emerald. Although expensive,
the few examples of bixbite that you will be able to find would
only cost about 10-40 times as much as emerald. An 0.4 carat
bixbite of good quality is being advertised at $1900. Cheap.
At one time there was an artificial division between what were
called "precious stones" (diamonds, rubies, emeralds, sapphires)
and "semi-precious stones" (everything else). This division
is no longer proper. Large mines are now producing emeralds
and other rare gemstones. Small, low quality gemstones of any
type are no longer rare. Supply and demand should be the main
factors in price.
All of the factors given at the top of this discussion must
be viewed in the terms of supply and demand. Large gemstones
are rarer than smaller ones. Good color ones that are clear
are rarer than poor colored cloudy ones. And so on. Good
quality, rare gemstones are not common and the price reflects
this fact. In the long run you get what you pay for.
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Last Updated September 8, 1996