Why the Value of Diamonds Change

Diamonds have always held a significant importance in our society. They are a status symbol that represent prestige and wealth of the individual who owns them. As precious as it is, the value of diamonds changes sometimes over the years.

Diamonds are often believed to be an investor’s best friend because they are thought to appreciate or increase in value over time. Therefore, determining a diamond’s best price is crucial for typical consumers and investors alike. However, through the decades, diamonds and their cost value has seen changes and fluctuations.

Below, we will discuss a few main reasons of why the value of diamonds change. 

Why the Value of Diamonds Change

The worth of a diamond has always been high since the first time it was discovered and there are a lot of different factors that determine the value of diamonds. But for the most part, the value and pricing of diamonds depend on the conditions of supply and demand in the market.

Similar to precious metals such as platinum, gold, and silver, the value of diamonds change depending on the demand for these precious stones as commodity.

For example, when new diamond mines are discovered, the price for diamonds usually fall. This is because the supply goes up significantly.

Similarly, like other valuable luxury items, the prices of diamonds depend on inflation as well. With more inflation comes an increase in diamond prices. A diamond that may have been purchased in 1960 would be worth considerably more in 2020. But even that could depend on a couple of different factors. This price increase could just be due to inflation or it could be because of the rarity of the diamond itself.

In addition to that, you have to take into consideration the 4C’s of a diamond that play a huge role in setting its worth. The 4C’s are:

• The value of diamonds can change depending on their clarity. The higher the clarity grade, the fewer the imperfections in the diamond, making it more valuable.
• A diamond’s cut determines its brilliance. The better the cut, the more the diamond will sparkle. This affects the final value of the diamond.
• Colorless diamonds are amongst the most valuable in the world. This is a price-determining factor because if a diamond is foggy, that will decrease its value.
• Carat means a diamond’s weight. Typically, the heavier the diamond, the rarer it is. And the price of any diamond relies heavily on its rarity.

Finally, a diamond that is certified by the Gemological Institute of America (GIA) is considered unquestionable in the diamond market and will have higher value than its counterparts that are not certified. GIA has very strict certification rules. Getting your diamonds certified is a big determining factor in controlling the price of a diamond.

Conclusion

Diamonds may not be as susceptible to market fluctuations as other precious items such as gold and platinum. However, the value of diamonds still changes with time depending on the factors discussed in this article.

In the end, the main factor that controls the value of a diamond is supply and demand along with the preservation methods used to ensure that the diamond stays in good condition with time.