Why Is A Colorful Diamond Worth so Much?

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Why Are Colorful Diamonds Worth So Much?

Colored diamonds are revered for their rarity and elegance. A colorful diamond adds a pop of color to everyday jewelry. Although there are many colors of diamonds, truly vivid natural colored diamond are rare to find. Due to simple principles of supply and demand, it’s easy to understand why these gemstones are so expensive. Since naturally colorful diamonds are even rarer than traditional white diamonds, or enhanced color diamonds, their supply is significantly more limited. This means that they are worth more.  This makes naturally colorful diamonds great for borrowing money against because they have a greater liquid value.

What Makes a Diamond Colorful?

Simply put, a colorful diamond is a diamond that was exposed to different elements, such as nitrogen, as it was forming. This exposure caused the diamond to form in a specific color. Most diamonds are exposed to at least one element during their formation. This is why few diamonds are purely white. However, the exposure must be ideal in order for a diamond to form in a vibrant canary yellow, or a vivid blue. This happens quite rarely, meaning that naturally occurring vibrant colors are rare.

What’s the difference between a white and a colorful diamond?

How Treatment Affects the Value of Colorful Diamonds

The most common treatments for color-enhancing diamonds include surface coating, irradiation, and high pressure high temperature (HPHT). Generally, color-enhanced diamonds are brown or yellow in their original state. These diamonds may also  have several internal flaws. Treatments and color enhancements  can hide these flaws by changing the diamonds’ appearance. Of course, there is always the chance that treatments can worsen the flaws or create new ones.

Not only are enhancements becoming more common, but lab-grown diamonds have gained popularity as well. As the price of natural colorful diamonds has gone up, many people have turned to lab-grown colored diamonds as a more affordable option. Over time, lab techniques for diamonds have advanced to increase carat weight because the price for naturally colorful diamonds goes up with the size and color intensity, making lab grown diamonds a more inexpensive option. A lab grown diamond may have a value as little as one-tenth (1/10) of that of a natural. However, this is another reason natural colored diamonds are great to borrow money against. Their rare attributes, whether it be carat weight or color intensity, make them fervently sought after for greater values.

An example of the price difference between color-enhanced and natural colorful diamonds would be this canary yellow, color-enhanced diamond. Diamond Banc bought this diamond ring for $7,500, and would have loaned the same amount. If the diamond been naturally colored this canary yellow, our seller could have borrowed or sold this to us for up to $75,000. That’s ten times the amount of the color-enhanced diamond!

Diamond Banc bought this color-enhanced canary diamond ring for $7,500.

Get Paid for Your Colorful Diamond?

If you are curious about the value of your colorful diamond, fill out our no-obligation Sell Your Diamond form or Asset-Based Loan form. Diamond Banc pays up to $500,000 in as little as 24 hours, whether you want to borrow against your diamond or sell it. You can also visit us at one of our five locations nationwide.

Get a Loan on Your Diamond

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