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Factors Determining Gemstones Values

Factors in Determining Values Per Carat for Gemstones

Most gemstones are priced according to weight. The exceptions are some carvings and cabochons, which may be sold by the piece rather than by the carat, since the work required to produce them exceeds the cost of the material. For the vast majority of gemstones, the price is calculated on a per carat basis. One gemstone carat is 200 mg. Carat, a measure of weight, should not be confused with karat, which refers to gold purity.

Much the same as you would expect from any other major industry, the price of gemstones is largely influenced by supply and demand.

One of the most important things for people when considering gemstones is the value and price for them but like in many industries, the laws of supply and demand are very much in place. This means that rare gems will carry a higher price tag.

For instance, a garnet is extremely stylish and attractive but it is not that rare, which means that its price tag is not too high. If you compared a garnet to a ruby of a similar size and condition, the ruby would always hold a higher price, simply because of the fact that it is a rare stone.

It is often difficult to place a true value on any particular gemstone because there is no uniform classification or measurement system in place. This is where gemstones differ from diamonds, which have been subject to a uniform measurement system since the 1950s. Traditionally, gemstones have been examined and evaluated by eye. When examining a gemstone, there are multiple factors that determine the value.

The price per carat of different gemstones can vary enormously, from as little as one dollar to tens of thousands of dollars per carat. Many factors influence the price per carat of gems. Here is a concise summary of the 10 factors that determine gem prices:

1. Gem Variety
Some gemstone varieties, such as sapphire, ruby, emerald, tsavorite garnet, tanzanite, spinel, alexandrite, paraiba tourmaline, chrome tourmaline and  imperial  silver star topaz, command extremely high prices, due to their superior characteristics and rarity.  Other varieties, such as many types of quartz, are abundant in many locations around the world, and prices are much lower. While the gem variety sets a general price range for a stone, the characteristics of the specific gem also have a major effect on the price per carat.

2.  Color
In colored gemstones it is color that is the single most important determinant of value. Ideal colors vary by gem variety of course, but generally, the colors that are most highly regarded are intense, vivid and pure. Gems that are too light or too dark are usually less desirable than those of medium tones. Thus, rich cornflower blue color in sapphire is more valuable than inky blue-black or pale blue.

3.  Clarity
Gemstones that are perfectly 'clean' with no visible inclusions are usually priced higher. In general, the cleaner the stone, the exquisite its brilliance. So while it is true that higher clarity grades are more highly valued, inclusions that don't interfere with the brilliance and sparkle of a gem do not significantly affect value. It is also worth noting that some gems, such as emerald, typically have inclusions.

4.  Cut and Polish
Gemstones should be cut with proper proportions to maximize the light that is returned to the eye.  But gem cutters or lapidaries often have to make compromises when cutting a particular piece of material.  If the gem color is quite light, cutting a deeper stone will provide a richer hue.  Conversely, a dark tone can be lightened by making a shallower cut.   In every case, the facets should meet cleanly and the surface should be well polished with no scratches.

5.  Size
For some gemstone varieties, such as quartz, the price per carat is fairly constant as the weight of the stone increases.  But in the case of many rarer gems, price does not increase in a linear fashion as the weight increases.  Indeed, for some gems, as well as diamonds, the price per carat can increase exponentially as the gem size increases.  Therefore, a 1 carat stone may cost $1,000 while a 2 carat stone may cost $4,000.  This means that good quality sapphires and rubies in larger sizes tend to have a much higher price per carat as well as other gemstones increases in price per carat over a certain size for example .5 carats to 2 carats are one price and then 2 carats to 5 carats it increases and so on.
Not only are larger stones more expensive, but gems in stock sizes (known as calibrated sizes), also tend to be more expensive.  This is because more material has to be removed to achieve the calibrated size

6.  Shape
Some shapes tend to be priced higher than others; this is partly due to demand and partly because of material issues with regard to cutting specific shapes.  In general, round gems tend to command a high price.  Rounds are much less common than ovals, since ovals are usually cut to preserve as much of the raw material as possible.  Cutting a round gen normally requires a greater loss of rough material and for very expensive materials like diamond, sapphire, ruby, alexandrite and others; this can have a significant effect on price.

7.  Treatment
Gem treatments, such as heating, fracture-filling, irradiation and diffusion, significantly improve the appearance of many gemstones, and these treatments are now routine for many commercial-grade stones.  A treated stone is always less valuable than a similar untreated stone.  Most of the stones that are routinely treated, such as ruby and sapphire, are now very rare in untreated form, and the untreated stones fetch a market price out of reach of most consumers.  If untreated stones are preferred, there are many choices.  A number of popular gems, such as tourmalines, spinel, amethyst and garnets are almost never treated.

8.  Origin
Strictly speaking, a fine natural gem is a fine gem, regardless of its origin.  Yet, in reality, certain gem varieties from locations such as Burma, Kashmir, Sri Lanka and Brazil, command a premium price.  It is difficult to say whether this is justified, especially with so many fine gems coming from Africa.

9.  Fashion
Some gems, such as blue sapphire, are always in fashion.  Other gems become fashionable for short periods, which results in price increases.  Recently we've seen andesine labradorite and color change diaspore in the spotlight.  There has also been an increased interest in rutilated quartz.  Some very fine gems, such as natural spinel actually have a lower than expected prices because limited supply means that the gems are not heavily promoted.

10. Supply Chain
The gem trade is a business and everyone in the supply chain, from the mine to the jewelry retailer, is trying to turn a profit.  Gemstones can pass through many hands on the way from the mine to the consumer, and the more brokers and distributors that handle the product, the higher the final price.  This means that the same gemstone may carry a price that varies by as much as 200%, depending on where it is purchased.