Why are Diamonds so Expensive? Top 5 Reasons (2024)

FAQs

Why are Diamonds so Expensive? Top 5 Reasons? ›

There are several factors that cater to the reasons behind, why are diamonds so expensive? The rarity, difficulties in mining, durability, cut, clarity, color, and carat of diamonds make them expensive and in demand. The four C's determine the value of the stone.

Diamonds are valuable and expensive because of their beauty, rarity, durability, and the marketing and branding efforts of diamond companies. The Four Cs - cut, clarity, carat weight, and color - also play a role in determining the value of a diamond.

Mining Costs

From exploring potential diamond sources and purchasing those lands to the cost of heavy machinery and equipment and paying the wages of workers, the process of mining diamonds is very expensive. On average, miners sort through 200 to 250 tons of rock to produce a single one-carat gem-quality diamond.

Diamonds have long been admired for their brilliance and rarity, making them one of the most valuable gemstones in the world. Several factors contribute to a diamond's value; perhaps the most renowned of these is the four Cs—carat, cut, clarity, and color.

Diamonds were formed billions of years ago and are extremely rare because so few are able to survive the difficult journey from the pits of the earth to reach the earth's surface. From the diamonds that are being mined today, only about 50 percent are thought to be high enough quality to be sold on the diamond market.

1. They Are Expensive and Often Overpriced: Diamonds are some of the most expensive and overpriced gemstones in the market. This is because diamond dealers use a lot of fancy marketing rather than focusing on the actual quality (cut, color, clarity, carat) of the diamond.

These qualities are universally described as the 5 C's – Carat, Cut, Colour, Clarity and Confidence. Understanding the 5 C's can help simplify choosing a diamond allowing you to focus on its beauty and ensuring it is the perfect fit for you or your loved one.

The 1800s brought increasing affluence to western Europe and the United States. Explorers unearthed the first great South African diamond deposits in the late 1800s just as diamond demand broadened.

Named after its discoverer, Arthur C.D. Pain, and not after any kind of suffering, painite is the rarest gemstone mineral in the world. Although more than 1,000 have been found, only a handful are in quality shape. Nonetheless, their rarity makes them valuable.

Rarity aside, is a diamond worth more than gold purely from a price tag perspective? Yes, diamonds cost more than gold, on average. Diamond prices rely on a few things, primarily the 4 Cs, or the diamond's cut, clarity, color, and carat weight.

Who is the diamond richest person? ›

Savji Dhanji Dholakia (born 12 April 1962) is an Indian businessman. He is the founder and chairman of Hari Krishna Exports, a diamond manufacturing and exporting company. He was awarded the Padma Shri in 2022.

Red diamonds are the rarest and some of the most expensive in the world. Also known as Fancy Reds, they come in a variety of shades ranging from orange-red to brownish red. Majority of the world's red diamonds come from the Argyle Diamond Mine in Australia.

In reality, diamonds actually aren't very rare. Diamonds are more common than other precious gemstones like emeralds, rubies, and tanzanite. In fact, even pure gold in its natural form is more rare than diamonds. Diamonds are made of carbon, which is the most abundant element on earth.

Just like the prices of silver, gold and platinum, the market for diamonds rises and falls in value based on demand for the gemstones as an actual commodity. When fresh diamond mines are discovered, the diamond prices naturally decrease as supplies become larger.

Much like the purchase of a vehicle, a diamond's value can rapidly depreciate after the initial purchase. But if you buy a high-quality jewelry piece and take good care of it, you can expect to maintain a relatively consistent value that may even go up over time.

Mined diamonds are the real ones

Engineered or lab-grown diamonds are also original since their chemical composition is only carbon. They are prepared under extreme heat and pressure, just as natural diamonds formed so many years ago. Therefore, both classes of gemstones are costly.

You're probably wondering, if diamonds aren't rare, then why are they so expensive? Because their pricing is never really about rarity like gold. Well, it all comes down to the good ol' rule of supply and demand. See, when there's high demand for something but limited supply, prices naturally skyrocket.

Gold is regarded as a safe investment that is often used as a hedge against inflation, and can be used as a form of currency, which is not the case for diamonds, meaning that gold could be worth more than diamonds.