Buying Diamond Jewellery But Unaware How Valuation Works? Here's Everything You Need To Know
Synopsis
Now a days, many people are prefering to buy diamond jewellery over simple gold jewellery. However, many people are unware how a jeweller calculates the price of diamond jewellery. This festive season before you go and buy diamond jewellery, know how pricing of diamond works and what you should check and take from jeweller.
Many people are now buying diamond jewellery. However, since the diamond jewellery comes attached with gold or silver jewellery, not many people give importance to how jewellers are pricing the diamond. Further, many people are unaware about what they should look at while buying diamond jewellery. For instance, purity of diamond, clarity etc.
Here are few things you should know about if you are planning to buy diamond jewellery.
Pricing Of Diamond
In diamond jewellery, there are two elements - diamond and a metal, usually gold. So a jeweller will charge for both separately.
But before we start, it is important to clarify that carat (CT) is a measure of weight of diamond and karat (KT) measures the purity of gold. A Google search can show the price of 24KT gold. However, that is not the case with diamonds.
Vipin Sharma, Chief Merchandising Officer, online jewellery BlueStone, says, "There is no specified benchmark for a quick reference of diamond prices. Various factors impact the diamond prices. Apart from the cost of procuring the diamond, there is a cost involved in finishing it by cutting, polishing, etc. Most critically, supply and demand factors also impact the price of a diamond."
It is important for customers to do their homework before finalising a product in such cases, says Parag Shah, Director of KISNA, a diamond and gold jewellery brand from Hari Krishna Group. "A customer must check with different jewellers for pricing per carat."
Quality Of Diamond
Checking the 4Cs is important while buying a diamond. Sharma says, "These are the globally accepted standard for ensuring the quality of a diamond. The price you pay for buying a diamond depends on the combination of 4Cs."
The 4Cs are:
a) Colour
b) Clarity
c) Cut
d) Carat weight
Colour : The colour of a diamond ranges from colourless to light yellow, with colourless the best and light yellow being the lowest quality. Colour grading of a diamond starts from D, and goes on till Z. A diamond with the colour D is considered to be of the best quality.
Clarity : It refers to the internal characteristics of the precious stone. As diamonds are minerals created by nature, it may contain some form of impurities, internal defects and surface defects. The measure of clarity is done between FL and I3. FL stands for flawless and I3 is imperfect . Some jewellers refer to flawless - the best quality - as loupe clean.
Cut : A raw diamond needs to be cut and polished before it can be used on jewellery. The quality of a cut helps in enhancing the beauty of the stone. The higher the precision of a cut, the more expensive the diamond. The cut of a diamond defines its brilliance. The cut's grading can range from excellent to poor - with very good, good and fair in between.
Carat weight : It is the physical weight of the diamond. One carat equals 0.200 grams or 200 milligrams.
Calculation of diamond jewellery price
In diamond jewellery, the stone is usually set on a precious metal such as gold, silver. Suppose you buy a diamond ring, the amount you pay for the jewellery is calculated as: (price of 18KT/14KT gold x weight of gold in the ring) + (price of diamond based on 4Cs x weight of diamond) + making charges + GST
Typically, 18KT or 14KT gold is used to make diamond jewellery. This is because 22KT gold is considered soft to hold a diamond.
Shah says, "To authenticate the quality of diamond, most jewellers usually issue a certificate of authenticity. The certificate has a photo of the jewellery and mentions the quality of the diamond."
Making Charges in Diamond Jewellery
The making charges for a diamond jewellery are on the higher side. Sharma from BlueStone says, "Depending on the intricacy and craftsmanship of diamond jewellery and effort that goes into the setting, the making charges tend to vary."
Shah from KISNA says the making charges for diamond jewellery starts from Rs 1,000 per gram. "Daily-wear diamonds will have higher making charges than a mid-size solitaire ring. The making charges will be cheaper by 3-5%."
Resale Value
While buying a diamond, it is important to know the resale of the stone as well. Most jewellers offer 90% of the prevailing price of diamond at the time of selling. However, if you go in for an exchange, then the price will be 90-100% of the prevailing price.
As there is no specific benchmark price, a customer may not know whether the price of the diamond has gone up or down. One can call a jeweller and find the prevailing diamond prices. Both Sharma and Shah point out that diamond prices have risen by 30% in the past two years. But why is the resale value only 90% of the prevailing price? Experts say this is because unlike gold, diamonds cannot be melted, cut or polished to make another piece of jewellery.
(The images for 4Cs of diamond have been sourced from Trend report KISNA The Eternal sparkle - Your Buying Guide.)
Source : https://economictimes.indiatimes.com/wealth/spend/buying-diamond-jewellery-but-unaware-how-valuation-works-heres-everything-you-need-to-know/articleshow/94982998.cms
