Why are diamonds valuable? Why are diamonds so costly? Indeed these are questions that have crossed your mind several times if you have had the opportunity to see the prices of diamonds.
Diamonds, one of the world’s most expensive stones, are essential in modern civilization.
These gleaming jewels, which are associated with love and passion, are most commonly found in engagement rings, wedding bands, and other stunning acceptable jewelry items.
But what precisely makes diamonds so precious, and when did they become so popular?
The most straightforward answer would be that diamonds created billions of years ago are incredibly uncommon because so few survive the uphill trek from the earth’s depths to the earth’s surface.
But, trust us, that’s not all that determines its value and adds to its price. Critical history events have left their mark on the diamond market.
Let’s investigate the origins of diamonds and why they are the most expensive and popular gemstones you can find today!
Diamond’s Over Time
To understand the question of what diamonds are today, it is essential to step into the past and see how and where they were created and acquired the value they have today!
The worth of a diamond dates back to the period when these exquisite stones were discovered.
These stones were discovered thousands of years ago in Southern India. India was the world’s leading diamond producer of diamonds. Diamonds were also discovered in Brazil, South Africa, Venezuela, Russia, and Australia.
South Africa is now the world leader in diamond production. DeBeers, the world’s largest diamond company, is headquartered here.
DeBeers has the world’s most valuable diamond mine. They also possess some of the world’s largest diamond mines. As a result, they have a significant impact on the diamond business.
Following a brief history of the diamond, it is critical to comprehend the many theories as to why diamonds are so valuable.
Diamond has been one of the most coveted gemstones and valuable stones globally for thousands of years. As we already mentioned, diamonds were formed billions of years ago and are rare due to the uphill journey from the earth’s depths to the earth’s surface.
Only half of the diamonds mined today are considered high enough to be sold on the diamond market.
Many knowledgeable specialists touch a diamond before it reaches the person who desires such a valuable stone. Its travel will have taken it across four continents and into the lives of hundreds of individuals and families.
Diamonds were only allowed to be worn by monarchs until the 15th century because they were seen to be a symbol of power and courage. Along with that – Diamond-wearers were supposed to be indestructible.
The diamond has grown to be recognized as the greatest love gift. They have long been associated with romance and folklore since their discovery.
The name diamond derives from the Greek word “unconquerable.” This symbolizes the eternal essence of love, consistent with Greek philosophy that the diamond’s flaming brilliance mirrors the eternal flame of love.
The tradition of wearing a diamond ring on a woman’s left hand’s third finger dates back to the early Egyptian notion. The vena amoris, which translates as “vein of love,” went directly from the heart to the top of the third finger on the left hand.
Today, the value of a diamond is often determined by putting it through the four C’s test: color, clarity, cut, and carat.
Now that we’re done with history, let’s learn more about the four c’s!
Diamonds, both mined and lab-grown diamonds, are graded by gemologists according to the 4Cs of diamond quality – cut, color, carat, and clarity.
GIA, or The Gemological Institute of America, established a famous, generally acknowledged grading system to estimate the value of a precious stone. The 4Cs influence the price of a diamond as well.
The First C – Cut
The cut quality of the diamond is the most critical factor in its appearance. A diamond’s cut may have a range of effects on the stone.
The stone’s cut dictates how bright and shining it is, how much it sparkles, and how clean and accurate it looks. Most significantly, the cut determines the price of the diamond.
The GIA assigns each diamond one of four cut classes. The cut grade of a diamond affects not just its brilliance but also its price.
Second C – Carat
What exactly is a carat, and what function does it play in the world of diamonds?
The fundamental definition would most likely be something like this: A carat is a measure of weight used to quantify the size of a gemstone, such as a diamond.
The carat assists in determining the quality of the diamond itself; a more significant number of carats will indicate a more outstanding quality but, of course, a higher price.
Clarity Is The Third C
When selecting a diamond, the third of the renowned C’s, clarity, must be significantly considered.
The existence and visible appearance of internal properties of a diamond, known as inclusions, and surface flaws known as blemishes are referred to as diamond clarity.
Color Is The Last C
In terms of the color itself, you can readily determine the quality of a diamond.
As a result, the most excellent grade diamonds are those with no color at all. On the other hand, the more color (including brown and yellow), the poorer the grade of the diamond.
What Makes Diamonds Valuable?
Diamonds are highly prized all around the world. They are a popular gemstone in many cultures and are frequently used in engagement rings, necklaces, and other jewelry pieces.
The Koh-i-Noor Diamond, sifted from the sand in India and said to be cherished by the Hindu god Krishna, is one of the most enormous, costly, and renowned diamonds.
It was passed down through the Indian court elite before being looted and placed in the British Crown Jewels in the mid-nineteenth century.
Aside from diamonds with religious or cultural significance, such as the Koh-i-Noor, several factors influence the value of any given diamond, including the level of demand in the diamond industry, ethical sourcing, and the quality of the diamond itself.
Diamonds have long been associated with power, wealth, and status. However, because the stone was a rare find, it was more valuable.
As we mentioned before, people discovered a true diamond treasure in Kimberly, South Africa, in the 1800s. This newly discovered mine has the potential to flood the market with diamonds, lowering the price of the valuable stone.
But what happened next?
De Beers soon intervened, purchased the mine, and kept strict control over the world diamond supply to prevent too many stones from entering the market. De Beers released only enough diamonds to fulfill annual demand.
This created the impression that diamonds were extremely rare.
As a result, the allegedly restricted supply drove the price of diamonds. Throughout the nineteenth century, De Beers effectively maintained a monopoly on worldwide diamond mining by stockpiling diamonds, limiting supply, and driving up demand and pricing.
In addition, De Beers launched an extensive marketing push to sell diamond engagement rings.
The brand replaced the long-established custom of ruby and sapphire engagement rings with an overwhelming demand for diamond rings.
The combination of high demand and the De Beers-controlled limited release of diamonds boosted the overall cost of diamonds.
So, we could say that a company’s past moves determined the value of the diamond, which continues to grow even today.
The Diamond Industry
As you might guess, if you’ve read the previous headlines, De Beers controlled over 90% of raw diamond output during the campaign.
The corporation reduced the overall supply of diamonds, driving up the price.
Surprisingly, despite their enormous demand, diamonds have little resale value. When traded at a local jeweler, the average diamond is only worth 20 to 40% of its original price.
So, what’s the deal, you may wonder?
Because the diamond business is closely regulated and promoted, diamond vendors can sell for high prices. Still, according to an insider story, they know what it’s worth when you attempt to sell it back.
By restricting the availability of new diamonds, the firms generate fake demand, and the lack of supply raises prices when they sell it, but not necessarily when you sell it.
All of this gives the illusion of a commodity that is difficult to buy and not widely held, but it is just a fabrication. Engagement rings and diamonds are now synonymous, but this was not always the case.
Back to DeBeers to explain this statement:
As we already mentioned several times – De Beers is one of the most well-known brands in the diamond business, holding some of the world’s largest diamond mines and wielding significant influence over the sector as a whole.
Diamond sales were down during the Great Depression of the late 1920s and early 1930s. De Beers had total control of the market. Hence their revenues collapsed.
They created an advertising campaign that revitalized the diamond market, and the tagline “a diamond is forever” was established.
De Beers built the discourse that reinforced the association between diamonds and engagement rings, boosting the market and leaving a lasting cultural imprint with this advertising campaign.
What Is the Real Cost of a Diamond?
Even though diamonds aren’t as expensive as we’re told to believe in terms of money, they have sentimental worth. Many couples still link diamonds with love and wish to propose a diamond engagement ring.
However, considerations such as diamond pricing and ethical concerns are beginning to weigh on modern customers.
Some consumers can’t afford the high prices of gem-quality diamonds, while others are turned off by the revelations of blood diamonds and environmental catastrophes linked with mining businesses.
People are becoming more aware of why natural diamonds are immoral and where they originate.
As customers look for diamond alternatives, heirloom and antique items are becoming more popular with the growth of vintage trends.
Where Do Diamonds Come From?
When looking for diamond jewelry, you’re likely to come across the phrase “earth-mined diamonds.”
And you might be asking why this is mentioned or important at all. This is because diamonds are found deep under the earth’s crust. Thus mining is necessary to obtain them.
The diamond market emphasizes the notion that diamonds must be mined to lend status to the item. It isn’t anything that can be readily obtained or recreated.
This is one of the reasons diamonds are so pricey.
To finally get diamonds out of the soil and into a jewelry store, it needs a whole industry, scientific approach, and geological resources, not to mention the effort of hundreds of people.
So, here are a few interesting facts regarding diamond origins:
- Diamonds develop deep inside the earth’s crust, at depths that man can’t reach.
- Volcanic eruptions transport diamonds from the earth’s deep crust to the surface.
- There is no other way to get diamonds from the earth’s crust; we must rely on volcanoes.
- People must extract them from lava eruptions that occurred millions of years ago.
Diamonds are not uncommon, but they are a unique gemstone in that they are naturally unrecoverable by man. This increases their worth. But this isn’t the only reason they’re so pricey.
Their high selling price resulted from a strategy undertaken by one company – De Beers.
Now that we’re at the end of the article, we believe we’ve clarified everything about the DeBeers company. Therefore, let’s once again consolidate the facts related to the formation of the diamond!
Diamonds develop deep under the earth’s surface when carbon deposits are exposed to tremendous heat and pressure. Some stones develop in days or months, while others might take millions of years.
Most natural stones available on today’s diamond market are mined in South Africa, Russia, Australia, India, and Canada.
Diamonds may also be created in a laboratory. Lab diamonds are made in a controlled environment by substituting the tremendous pressure and temperature that a natural diamond is subjected to.
They are carbon and have the same chemical composition as natural diamonds.
If you were looking for an answer to a frequently asked question when talking about diamonds, which is: Why are diamonds valuable? We tried our best not to give a simple answer in this article, which is often related to the rarity of diamonds.
Instead, to better understand how the price of a diamond moves and which aspects define diamonds’ value – we went into the past. History turned out to be an essential aspect of this topic.
We hope that we have clarified the past and value of the diamond in the best way.
Also, we hope you enjoyed reading it at least as much as we did while collecting information and writing this article for you!
Related Read: What Is More Valuable Than A Diamond?