Finally, a GIA cut grade for round diamonds. After years of study, computerized modeling techniques and debate, the GIA has announced its new five-grade system for proportion analysis. A lot of science went into this system that looks at angles, percentages and light return so while the chosen nomenclature isn’t too exciting, it is easy to present. It goes Excellent, Very Good, Good, Fair and Poor. Their new Facetware™ software can be picked-up on-line to do your own estimates and the Gem Trade Lab will start using the system in 2006. This will not result in any changes at NGL, since these are the terms we have always used!
As you are aware, diamond prices have increased considerably over the past twenty-four months. What you may not have noticed is a change in the availability of goods and standards to which they are cut.
Recently the U.S. dollar lost ground in the world market. Since the Central Selling Organization (CSO) transacts all diamond parcel sales in U.S. dollars, this decline has given the U.S. less buying power while increasing buying power abroad. To equalize this effect, the CSO raised rough diamond prices.
The significance of this phenomenon in the U.S. market is clear. We pay more for diamonds while finding the selection meager to say the least. U.S. jewelers are finding it difficult to swallow these increases creating strong resistance throughout the country.
Diamond cutters, to regain from plummeting profits, have started cutting to retain more weight from the rough crystal. as a result, we are seeing “lumpy” stones with unusually thick girdles. Good to very good proportions seem to be tossed by the wayside.
Although this solution does offer those sought-after size points (i.e. 1.00ct, 0.50ct, etc) at a reduced price, some beauty is sacrificed. In addition, it should be noted that these stones appear smaller due to a smaller diameter. From an appraiser’s standpoint these “lumpy” stones cannot be valued the same as a properly cut diamond of similar quality. In some cases we are seeing as much as 25%-30% deduction in per carat price.
Some experts argue that these lumpy stones could become a standard. I, for one, appreciate the unique beauty of a well-cut diamond and would hate to see the industry accept these “inferior” cuts as a standard. If enough people in the industry demand better cut diamonds, we may see a reversal of this trend. For now, these lumpy stones are a reality and the bottom line is you are paying more for less.