Why Are Diamonds so Valuable?

Why Are Diamonds so Valuable?

Introduction

Pound for pound, nothing’s more valuable than quality diamonds. But why are they so valuable - and are they worth it? At the end of the day, aren’t diamonds just sparkly rocks? 

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Let’s take a look at the history of diamonds and their use in jewlery, and uncover what exactly makes these precious stones so valuable.

What are diamonds?

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Diamonds are one of nature’s most beautiful creations, but also one of its most simple. These gemstones are formed when pure, concentrated carbon is placed under pressure and exposed to heat. This process turns carbon into diamond: one of the hardest substances on earth.

The diamond formation process can take an extremely long time and occurs deep underground. But lots of other compounds are also created beneath earth’s surface - so what makes diamonds stand out from the crowd?

Busted: myths about what makes diamonds valuable 

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When it comes to the value of diamonds, there are quite a few misconceptions out there. The real reasons why diamonds are so expensive might surprise you.

Myth: diamonds are valuable because they’re rare

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. They’re actually one of the more common precious stones you can find. However, many natural diamonds are either not large enough to be cut into gems, or have undesirable coloration. So, the rarity of good quality diamonds with desirable coloration is what makes them seem rare.

Myth: larger diamonds are more valuable

1 to 5 carat diamonds

Just because a diamond has a high carat weight doesn’t automatically mean it’s a valuable diamond. There are other factors to consider - like color, clarity, and cut. A five carat diamond with a yellow tint and tons of inclusions that’s poorly cut won’t be as valuable as a one carat diamond that’s flawless.

Myth: diamond supply is on the decline, making them more expensive

While the supply of some fancy colored diamonds is decreasing, white diamond supply is not in jeopardy. The amount of diamond mines has increased over time, and lab created diamonds are becoming a more viable option. Lab grown diamonds ensure a nearly endless supply, and they’re more ethical and environmentally friendly than natural diamonds.

So what actually makes diamonds valuable?

A rich history

Even though diamonds might not be as rare as we thought, they’ve been viewed as a valuable stone throughout human history. In ancient Greece, diamonds were considered a mystical, powerful stone that was indestructible. And monarchs have adorned themselves with diamonds for hundreds of years as a sign of status and wealth.

Diamonds had their debut as an engagement ring center stone back in 1477, when an Austrian archduke proposed with one. So even though diamonds aren’t the rarest of them all, we humans have always valued diamonds.

The magic of marketing

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With the popularity of diamonds spanning thousands of years, it was only a matter of time before someone tapped into their marketing potential. The way diamonds are considered valuable today has a lot to do with the marketing efforts of diamond company De Beers during the last century.

In the 1930s, De Beers funnelled tons of money into marketing efforts to position diamonds as the perfect stone for engagement rings. This company created the iconic phrase “a diamond is forever,” and is a huge reason why diamonds are considered the “gold standard” for engagement rings.

Even before that, De Beers made efforts to stockpile diamonds from mines and release them slowly. This made diamond supply appear limited, so the gemstone seemed rarer than it was. This increased the cost of diamonds in the 1800s, contributing to their reputation as a valuable stone.

Mining is costly

The value of diamonds isn’t all smoke-and-mirrors marketing. There is a grand total of 53 locations on the planet with adequate diamond supply for mining. And mining itself is an extremely expensive endeavor.

It’s costly to use mining equipment and house and pay workers, and finding diamonds that are good enough to use in jewelry is not guaranteed. By the time enough good quality diamonds are mined, lots of money has been spent.

All work and no play

Once mined, rough stones still need to be evaluated and cut. Cutting and faceting diamonds is difficult work - as well as costly. Highly skilled gemcutters put a lot of elbow grease into cutting high quality diamonds, which is reflected in their price.

Cutters are experts that spend lots of time perfecting each and every diamond. They perform measurements and calculations to determine the best way to cut each rough stone, and then perform the work. Their time and hard work are essential to the creation of a high quality diamond, and so contribut to the value of the stone.

What about lab diamonds?

Lab diamonds ring

Between the cost and ethical dilemma posed by natural mined diamonds, many people are considering lab grown diamonds. Millenials especially tend to pursue more ethical diamond options, and want to save money on a ring to spend on a honeymoon or a home.

The price of lab grown diamonds is lower than that of natural diamonds, as there are no mining costs associated with them. But since they’re still real diamonds, they’re valuable and still don’t come cheap. Lab grown diamonds usually cost 30-40% less than their natural counterparts.

Conclusion

Diamonds have an element of universal appeal that has made them valuable in mankind’s eyes for thousands of years. Their beauty, durability, and symbolic meaning have only made them more appealing over time.

Between their sentimentality and the cost of mining or growing, then cutting and polishing, diamonds, it’s easy to see how their cost reflects their valuability.

Whether you prefer a natural diamond or want to opt for a lab grown diamond, these valuable stones are durable pieces you can cherish for a lifetime. Browse Keyzar’s extensive collection of diamonds here

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