How Are Diamonds Graded?

Diamond grading is conducted by independent labs, the best known and most highly regarded being The Gemological Institute of America.

The GIA standardized diamond grading after news stories began addressing the unscrupulous behavior of some traders, and it was feared that the jewelry industry might suffer a derogatory reputation akin to that of used car dealers.

Now, thanks to the standardization developed by The GIA, you can rest assured that when a diamond is given a grade by either the GIA or AGS (American Gem Society), the quality of the diamond you purchase will match the grade.Valuing a Ring

The 4 C’s

Diamonds are now graded according to the GIA International Diamond Grading System and the 4Cs: Cut, Clarity, Color, and Carat Weight.

Although other independent labs have developed their own grading system, a grading report, or certificate, by the GIA or AGS is considered to be the most reliable, and all labs regardless of the system they employ address the 4Cs in their certificates.

Knowing the basics of the 4Cs will help you to make an intelligent purchase of your next diamond.


The diamond Cut refers to a diamond’s reflective qualities, symmetry, and polish and, other than carat weight, is the most important factor that determines value. A diamond by nature is rather dull and unremarkable. It is the diamond cutter’s job to extract the most light reflective beauty out of the diamond rough with minimal sacrifice to the size of the diamond.

This is achieved by making cuts to the stone that are neither too shallow nor too deep, which would result in light leaking out of the side or the bottom instead of being reflected to a viewer’s eye, which is the goal. When you pick up a diamond, if it emits sparkle and brilliance, you are looking at a well cut diamond.

The cut of a diamond is given one of the following grades

  • Ideal: Maximum brilliance and dispersion.
  • Premium: Closely equivalent to the Ideal grade, these diamonds can usually be purchased at lower price.
  • Very Good: Most light entering in is reflected, but the cutter has decided to stray a little from preferred proportions for the sake of larger size.
  • Good: Much of entering light is reflected but the cutter has opted to extract the largest size from the diamond rough rather than to make a small diamond with premium reflectivity.
  • Fair/Poor: Only small portions of light entering in are reflected. Carat weight is emphasized over brilliance.

A Note about Shape

Although the general shape of a diamond is noted in a lab report, a diamond’s shape is something different than the cut. A diamond cutter looks at a rough diamond and makes a determination of what shape will be best suited for the cut, but the cut itself is concerned with light reflection and size or symmetry and the cut grade is never determined by anything related to a diamond’s shape.

Tips for Choosing a Cut

When choosing a diamond cut on a budget, you first need to decide if the size of the diamond matters more to you than light reflection. If so, you should choose a stone that has a “Good” cut grade, as you can find some nice deals on these kinds of diamonds.

If you are on a budget but want a very fine cut, you may have to sacrifice size for beauty, but you can compensate for the diminutive appearance by selecting a setting that is ornamental or one that has accompanying gemstones. Just make sure the setting gives compliment to the diamond and that accompanying gems are not larger than the diamond itself.


The majority of diamonds contain flaws in the form of internal inclusions and external blemishes, but for grading purposes any flaws are simply referred to as inclusions. A grading lab takes into account many characteristics of inclusions when grading for clarity such as number, size, position, nature (i.e. clouds, knots, feathers), and color.

These characteristics give each diamond its own “fingerprint” and are used not only for grading purposes but for identity as well. Diamond clarity is discovered by utilizing a 10x loupe with darkfield illumination in GIA labs and the grading scale is as follows:

  • F: Without flaws either internally or externally.
  • IF: Without internal flaws, however the diamond has some surface area flaws.
  • VVS1, VVS2: This grade signifies that a diamond has very small inclusions that are difficult to see even by a gemologist using 10x magnification.
  • VS1, VS2: Tiny inclusions difficult to see by anyone using 10x magnification.
  • SI1, SI2: Small inclusions easily detectable when seen by 10x loupe magnification.
  • I1, I2, I3: Inclusions that are visible to the naked eye.

Clarity Grade Controversy

Some claim that the Clarity scale inflates the importance of invisible inclusions, resulting in unfair price hikes. It is argued that most people do not carry around a 10x loupe to view diamonds owned by other people, and that is the only way any flaws can be detected from VVS1 to SI2-so what is the point in paying more for diamonds with less invisible inclusions than others?

Buying Tips

  • If you have any doubt about the certificate or report of a diamond you are interested in purchasing, you can ask the jeweler to send the diamond to the GIA and they can identify the stone by its inclusion fingerprint and carat weight, matching it to the certificate in question.
  • Engagement rings are purchased to be worn, not sold. You can save money by buying a diamond in the VS1 to SI2 range without anyone ever knowing you have less than a flawless diamond.


Color grading has to do with detecting the absence or presence of yellow or brown color in what should be a colorless stone. The fact of the matter is that most diamonds are not colorless, but have some yellow or brown body color in varying degrees, and labs compare diamonds under microscope to a set of master stones to determine the amount of color in the diamonds and how those diamonds should be graded according to the following scale:

  • D-F: Colorless
  • G-J: Near Colorless
  • K-M: Faint Yellow
  • N-R: Very Light Yellow
  • S-Z: Light Yellow

Beyond “Z” is the category of “Fancy Color” diamonds. These are diamonds that have rare color such as blue, pink, purple, and red, and their color and rarity is what makes them desirable, and, consequently, more expensive.

Buying Tips

  • Color grades G-I have color which is virtually undetectable by an untrained eyes. If your setting is platinum or white gold, you should opt for one of these.
  • If your setting will be yellow gold, you can save money by choosing a stone that shows more color. Some people even prefer the warm look of diamonds with a little yellow glow, and as color has a great impact on price, this may be the best choice for many.

Carat Weight

The size diamonds are expressed according to their carat weight. 1 carat can be expressed like so:

  • 1 ct.
  • 100 points
  • 200 milligrams
  • 1/5 gram

Labs measure a diamond’s carat weight up to three decimal places; however, at the retail level only two decimal places are usually mentioned. These exact measurements along with inclusion characteristics help to identify a diamond, and a diamond’s carat weight has the greatest impact on price of all the 4 C’s.

Buying Tips

  • Buying a large size diamond on a budget is possible by purchasing a stone with lower quality levels of color, clarity, and cut.
  • Shop around and compare the appearance of different size diamonds. Some smaller diamonds have the appearance of large size due to their cut and shape.
  • Consider both finger size and the setting when making a decision. A small diamond looks larger on a slender finger, and an appropriate setting can make a diamond seem bigger as well.

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