How Well Do Diamonds Hold Their Value?

Diamonds are highly covetable, especially for engagement rings, but do they really hold their value? Your diamond’s ability to hold its value is determined by a number of different factors, particularly its inherent quality. Any diamond that’s deemed high quality at purchase is more likely to hold its value for longer.

What makes a high quality diamond?

A diamond is regarded as high quality due to a number of factors, mostly the four c’s: Carat, clarity, cut and colour. Carat relates to weight, clarity relates to a diamond’s ‘flawlessness,’ cut relates to the style the diamond is cut into, and colour relates to the hue of the diamond.

A high quality diamond will be rated as closely to ‘flawless' as possible on the GIA Diamond Clarity Scale. It will usually weigh over 0.75 carats, and will almost always be rated D or ‘colourless’ on the GIA colour grading scale, as white diamonds are the most popular diamonds. The exception to the colour rule are pink diamonds, which are much rarer than white diamonds, and can be worth up to 20 times as much as a white diamond of the same carat.

Certification is proof of quality and thereby value

When considering selling your diamond, every prospective buyer will ask to see a grading certificate. If you don’t have one, expect to pay to acquire one, or sell your diamond at a very low price.

Not all diamonds are created equally, so reputable jeweler stores will ensure all their diamonds are certified. Certified diamonds undergo a rigorous scientific process to evaluate their quality and thereby determine their value. The outcome of this process is a grading report detailing the diamond’s authenticity, as well as details including the stone’s weight, grade, cut, information about any enhancements that have been made (e.g. laser cutting) and any other important facts.

Essentially, certification is a promise of trust and verification that the diamond jewelry you have chosen is of exceptional quality. A trusted certificate is one of the only ways you can prove your diamond’s quality and ability to hold its value if you wish to resell it.

IGI certification is the most trustworthy diamond certification body

The International Gemological Institute (IGI) is one of the world’s most highly regarded diamond certification bodies, and any diamond jewellery purchased with an IGI certificate indicates the diamond is authentic and from a genuine seller. IGI certification analyses diamond quality according to the certification process above, as well as the stone’s ability to pass quality control and security processes.

Great jewellery stores will also comply with ethical diamond sourcing guidelines, and provide you with legal assurances if their jewellery complies with ethical regulations such as the Kimberly Process.

If your diamond has an IGI certificate pledging high quality, as well as an assurance of ethical sourcing, your diamond is more likely to retain its value for longer, or even slightly increase in value over time.

Diamonds aren’t like silver or gold

While your diamond is beautiful and mined from the ground, it doesn’t have a simple, tangible market value like gold or silver. The gold and silver market is very liquid, where as the diamond market is not. Reselling your diamond is much more complicated than selling these precious metals due to the diamond market’s fluctuations, and the many elements that contribute to diamond value.

More stones aren’t better than one

Larger, heavier stones will always be valued more highly than a number of smaller stones equating to the same carat. This is because a larger stone is more rare and usable. If you’re looking to purchase a piece of diamond jewellery that will hold its value, look for pieces with a single larger stone of a high quality, rather than a ‘Halo’ setting where smaller diamonds decorate a slightly larger stone to make it appear bigger.

Diamonds aren’t an investment in wealth, they’re in an investment in love

Unless your diamond was worn by a royal family member a few centuries ago (and you can prove it) it is fairly unlikely you can sell it for a profit within just a few decades. This is mostly due to the fact most jewellers buy diamonds wholesale, making the price you paid for the jewellery usually at least double what they paid for the stone. However, remember the reason why you purchased, or even received the diamond in the first place.

Diamonds are forever, and they’re prized as a symbol of love, connection and commitment more than a tradable commodity. Where possible, enjoy your diamond and your jewellery rather than contemplating its value.

Not all diamonds are created equally, making a diamond’s ability to hold its value completely unique to every different stone. As a rule, though, if you ensure your diamond is certified by a recognized, internationally certification body, you have done everything you can to ensure you diamond is of high quality, and can hold its value for longer.