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A diamond's cost is based on the characteristics known as the "4 C's". Color, Clarity, and Cut (proportion) are the quality elements which together with the Carat Weight determine the value of a stone. The closer a diamond grades to the left of one or all of these scales the rarer and the more costly it will be. While clarity is frequently assumed to be the most important factor of all the "C's", in fact, colour and cut (especially cut) have a more profound affect on the visual appearance of a diamond.
Color
Many experts name color as the number one consideration in choosing a diamond. A diamond's color is graded on an alphabetical scale from D-Z, with D being absolutely colorless and Z being light yellow. Beyond "Z", a diamond is considered to be an exotic or "Fancy" color.
DIAMOND COLOR SCALE
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
Colorless
Near Colorless
Faint Yellow
Very Light Yellow
Light Yellow

(The color used in this diagram is for presentation purposes and is not actual color.)

Since color differences can be so subtle, they are impossible to determine by the untrained eye. To grade a diamond, gemologists often place it on a white background next to another diamond that has been previously graded. If all other factors are equal, the less color in a diamond or the higher color rating, the more valuable a diamond becomes. Likewise, as the amount of color increases, the price of a diamond decreases (though this does not necessarily reduce the beauty of a diamond.)
Clarity
All diamonds have identifying characteristics, but most are invisible to the naked eye. To view a diamond, experts use a 10x magnifying loupe which allows them to see the appearance of tiny crystals, feathers or clouds. These natural phenomena are called inclusions.There are five categories in class that anyone interested in purchasing a diamond should be aware of when grading clarity.
DIAMOND CLARITY SCALE







FL (Flawless) - IF (Internally Flawless)
Flawless Diamonds reveal no flaws on the surface or internally are the rarest and most beautiful gems. Internally Flawless Diamonds reveal no inclusions and only insignificant blemishes on the surface under 10x magnification.
VVS1 - VVS2 (Very, Very Slightly Included)
Very difficult to see inclusions under 10x magnification. These are excellent quality diamonds.
VS1 - VS2 (Very Slightly Included)
Only looking through a 10X loupe can pinpoint the inclusions in this category and are nearly impossible to see with the naked eye. These are less expensive than the VVS1 or VVS2 grades.
SI1 - SI3 (Slightly Included)
Diamonds with inclusions easily identified under 10x magnification. Finding flaws in this category with the naked eye is difficult. The gems in this category maintain their integrity, depending on the location of the inclusions.
I1 - I3 (Included)
Diamonds with inclusions which may or may not be easily seen by the naked eye. The flaws on the stones in this category will have some effect on the brilliance of your diamond.
Carat
Carat is often confused with size even though it is a measure of weight. The cut of a diamond can make it appear larger or smaller than its actual weight. One carat is the equivalent of 200 milligrams. One carat can be divided into 100 "points". A .75 carat diamond is the same as 75 points or a 3/4 carat diamond. Since larger diamonds are rarer than smaller diamonds, the value rises exponentially with carat weight.
DIAMOND CARAT SCALE
Cut
Cut actually refers to two aspects of a diamond. The first is its shape (round, marquise, etc) the second is how well the cutting has been executed. A diamond's cut will most certainly influence its fire (the lovely rainbow colors that flash from within) and brilliance (the liveliness and sparkle), as well as its perceived size and even, to some degree its apparent color. Different cuts reflect light in different angles. A diamond must be cut in a geometrically precise manner to maximize its brilliance.
As an example, a round brilliant cut, which has 58 facets, is shown below. Since the quality of the cut is directly responsible for the stone's beauty, the precision with which the facets are arranged is of prime importance. They determine the amount of light reflected to the eye, called brilliance.