Gemological characteristics of diamonds

The use of diamonds as gemstones of decorative value is the most familiar use to most people today, and is also the earliest use, with decorative use of diamonds stretching back into antiquity. The dispersion of white light into a rainbow of colors, known in the trade as fire, is the other primary characteristic of gem diamonds, and has been highly prized throughout history. Over time, especially since around 1900, experts in the field of gemology have developed methods of characterizing diamonds and other gemstones based on the characteristics most important to their value as a gem. Four characteristics, known informally as the four Cs, are now commonly used as the basic descriptors of diamonds: these are carat, clarity, color, and cut.

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Most gem diamonds are traded on the wholesale market based on single values for each of the four Cs; for example knowing that a diamond is rated as 1.5 carats, VS2 clarity, F color, excellent cut, is enough to reasonably establish an expected price range. More detailed information from within each characteristic can then be used to determine actual market value for individual stones. Consumers who purchase individual diamonds are often advised to use the four Cs to pick the diamond that is "right" for them; to these is sometimes added the "fifth C" of cost.
Other characteristics not described by the four Cs can and do influence the value or appearance of a gem diamond. These characteristics include physical characteristics such as the presence of fluorescence, as well as data on a diamond's history including its source and which gemological institute performed evaluation services on the diamond. Cleanliness also dramatically affects a diamond's beauty.
There are four major gemological associations which "certify" diamonds: that is, define the four Cs of a diamond. While carat weight and cut angles are mathematically defined, the clarity and color are judged by the trained human eye and are therefore open to slight variance in interpretation.

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Gemological Institute of America (GIA) was the first laboratory to issue modern diamond reports, and holds the highest reputation amongst gemologists for its consistent, conservative grading.
American Gemological Society (AGS) is not as widely recognized nor as old as the GIA, but garners an equally high reputation.
International Gemological Laboratory (IGL) is a generally respected laboratory but suffers from a negative industry reputation for its grading practices, which are perceived by critics as being either less conservative or less consistent than the GIA and AGS.
European Gemological Laboratory (EGL) has a similar reputation to the IGL.

Carat

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The carat weight measures the mass of a diamond. One carat is defined as exactly 200 milligrams (about 0.007 ounce). The point unit—equal to one one-hundredth of a carat (0.01 carat, or 2 mg)—is commonly used for diamonds of less than one carat. All else being equal, the value of a diamond increases exponentially in relation to carat weight, since larger diamonds are both rarer and more desirable for use as gemstones.
The price per carat does not increase smoothly with increasing size. Instead, there are sharp jumps around milestone carat weights, as demand is much higher for diamonds weighing just more than a milestone than for those weighing just less. As an example, a 0.95 carat diamond may have a significantly lower price per carat than a comparable 1.05 carat diamond, because of differences in demand.
A weekly price list published by Rapaport of New York, of diamond prices per carat, for different diamond cuts, clarity and weights, is currently considered the de-facto retail price baseline. Jewelers often trade diamonds at negotiated discounts off the Rapaport price (e.g., "R -3%").
In the wholesale trade of gem diamonds, carat is often used in denominating lots of diamonds for sale. For example, a buyer may place an order for 100 carats of 0.5 carat, D–F, VS2-SI1, excellent cut diamonds, indicating he wishes to purchase 200 diamonds (100 carats total mass) of those approximate characteristics. Because of this, diamond prices (particularly among wholesalers and other industry professionals) are often quoted per carat, rather than per stone.
Total carat weight (t.c.w.) is a phrase used to describe the total mass of diamonds or other gemstone in a piece of jewelry, when more than one gemstone is used. Diamond solitaire earrings, for example, are usually quoted in t.c.w. when placed for sale, indicating the mass of the diamonds in both earrings and not each individual diamond. T.c.w. is also widely used for diamond necklaces, bracelets and other similar jewelry pieces.

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