(Jewelry Valuation): How to Determine the Value of a Specific Jewel

Except for diamonds, there are no certain prices for precious stones valid around the world. Some countries are trying to set the rules. However, these rules apply only to each of these countries. In many countries of the world, there are no certain rules for valuation of the jewelry except for gold, silver, and diamonds. The price of jewelry is the result of an agreement between a seller and the buyer. Of course, there are basic rules to estimate the value of the gemstones described below.

How to Value a Jewelry

First of all, you have to define your gemstone, so what is the family of that particular stone? What is the variety of it? Natural or synthetic? So if the stone turns out to be natural, the next question is: Can it be treated? If the stone can be treated, the next question is: What kind of treatment was performed on the stone? These initial parameters will then help you to estimate the quality of the gemstone. This is a typical type of information you will find in all certificates issued by gemological laboratories. Because if there is not an experienced gemologist and you do not have the tools of the gemology laboratory you cannot value a piece of jewelry by yourself.

However, this is not enough to estimate the value of a piece of jewelry. Once the gemstone is clearly identified, four additional criteria must be defined. The first is the color of precious stone, the second is the clarity of the stone, the third is the quality of cut and the fourth is the weight of the stone. These four criteria are well known in the diamond market, but a few people know that the same rules apply to all gemstones.

When you determine the stone, there is still a point to identify: the price of the stone in the market varies depending on your geographical location as well as your location in the trading market. Indeed, if you compare the price in a country at the other end of the world, a perfect identical stone will be cheaper in their country of origin. Finally, the price will be different, depending on whether you buy precious stones in the wholesale or retail market. It will also be different depending on whether the stone is mounted on a jewel or not.

Indeed, as in all economic sectors, the more intermediaries between the jewelry producer and the consumer, the higher the price differences. No quick fix. If you want to estimate the price of a gemstone, you should meet a supplier of precious stones in your area and conduct market research for yourself. Therefore, by comparing prices, you will have a rough idea. In this geography, estimating the price of precious stones is a permanent job because prices can change rapidly.

What Is Carat and How to Calculate It

The precious stones are weighed on very sensitive scales and their weights are determined in carats. In precious stones, no measurement is made in grams. Weights below 1 carat are expressed in centimeters. Again, for the half weights over 1 carat, centimeters are used (for example 1 carat and 30 centimeters). High carat diamonds are available as well as gemstones which weight below 1 carat. The higher the value of the carat, the more its value increases and its availability decreases.

If we express the carat in grams, the carat is the measure of one-fifth of the gram. That is, 5 carats is 1 gram. Precious gemstones are often very small when extracted from nature. Therefore, gemstones with high carat are more valuable, since they are rarely found. Cutting is a very important task in order to maintain the value of gemstones. A good stone-cutting master can shape the gemstone with the least waste. In order to give a special shape during stone cutting, 57 faces are usually formed on the surface of the gemstone. When you consider the process of drawing 57 faces to a rice-sized stone, you can better comprehend how hard it is for the stone master, and he/she has to have incredible skill and experience.

Since the weight of the carats is very important for the value of the gemstones, they are weighed only on special precision scales. Even one percent of a gram weight is very valuable in carat measurement. We can say that the gemstone with a higher carat value is larger, but there is not a definite formula about the proportion of this value. Besides, we can not say that the value of two different gemstones in the same carat is the same. Although it is one of the most important features that determine the value of stones, it is not the only measure used.

Diamond Valuation

Diamond is one of the rarest precious stones in nature. Diamond is the favorite jewelry of women and it has a special cutting technique. Diamonds are cut in a certain form and converted to jewelry. There are many features available to calculate the price of the diamond that turned into a jewel. As mentioned before, these are referred to briefly as 4C. These are Cut, Clarity, Carat, and Color. According to these properties, the value of the diamond decreases and increases. Each feature has a distinct value and must be in harmony. Diamonds need great care when cutting. A well-cut diamond can be sold at a good price.

While many different pricing techniques are available, the report of Rapaport has come to the fore. This report was developed by Martin Rapaport. After GIA graduation, Martin Rapaport learned to process the raw diamond in Antwerp, Belgium. He started his career in 1975 as a crude and processed diamond broker. In 1978, the Rapaport Diamond Price List, called RAP or LIST by industry professionals, became the sole source of diamond pricing in the whole diamond market in a short time. Over the years, the name of this list was renamed as Rapaport Diamond Report, and in 1982, RapNet was founded on the internet to trade diamonds and then it was named as Diamonds.net. Martin Rapaport initiated the Kimberley Process as a member of the World Diamond Council. Although Martin Rapaport is stronger than DeBeers in the diamond market, it applies this force without any deterioration.

Rapaport consists of a price list string. Thus, it offers the person an idea about the diamond price. It is very difficult to reach this report. It is protected as it only can be seen by members. Those who do not have the tools to follow the market carefully to determine the price of a diamond.

The 4 C Rule for Diamond Valuation

  • Cut

Diamond cutting is a factor related to stone symmetry and dimensions. The cut determines the ability to give sparkle to the diamond and the diamond to break the light. Although the stone has perfect color and clarity, it is a feature that should be given importance since it will exhibit a matt appearance with a bad cut. Because the better the cut, the brighter the diamond will be. The light entering from a surface of the cut diamond at the right proportions is reflected from the other surface and diffuses through the upper part which is called “crown”. If the cut is too deep, some of the light escapes from the lower part of the diamond called “cone”. The fact that the cut is not deep enough causes the light to escape from the cone and cause the diamond not to shine enough.

  • Carat

Carat is related to the weight of the diamond. Carat is one-fifth of grams. One carat equals 200 milligrams. A carat represents 100 points and 0.25 carats represents 25 points. The size is an important factor in the diamond grading, but they can be of a very different price depending on the quality of the two diamonds of equal size. The fact that two different diamonds have equal carat weight does not require that they are at the same price.

  • Color

The diamonds are formed under extreme heat and pressure, and during this formation the particles of other elements can also be incorporated into the atomic structure of the diamonds, resulting in a variety of colors. The diamond moves from dark yellow to vivid, bright white. The diamonds are categorized by looking at how close they are to color. The rarest and whitest ones are D, E, F, G, but the majority of the diamonds are between H-L colors. The color M and the underneath are visible with a yellowish tint. There are also diamonds in very rare colors. These are rare stones with distinct colors such as pink, blue, yellow, and red.

  • Clarity

Almost all diamonds contain very small pure carbon particles as building blocks. These are particles that turn each diamond into a rare unique stone and are called inclusion. The clarity feature separates each diamond completely from the others. There are no two diamonds in the same place that may have a similar inclusion. In large laboratories such as GIA and HRD, there are five factors used to determine the clarity of a diamond.

Gold and Silver Valuation

Gold and silver are traded on organized exchanges or on OTC, ie non-organized over-the-counter markets. The over-the-counter market is a very active market that transactions can be carried out 24 hours a day in the framework of bilateral agreements. All kinds of details about how the trading will take place between the two parties (purity of the precious metal, premium or discount, delivery point, which party to undertake the transportation, and how the exchange will be realized) can be understood.

Precious metals exchanges are organized markets where all buyers and sellers come together and are organized according to the transaction standards that all members must comply with. There are unique advantages and disadvantages of trading in both markets. From here, the ingots reach smaller investors. Gold is used as an investment product in many areas, but the World Gold Council (WGC) reports that almost half of the demand for gold comes from the jewelry sector.

So What Kind of Process Do Gold and Silver Go Through Until They Got into the Consumer’s Hands?

Gold and silver come out of the mines as we know it. Most of these mines are located in China, Australia, America, Canada, Peru, South America, Mexico, Uzbekistan, and Indonesia and most of the gold and silver come from these countries. These top ten countries supply very large amounts of gold and silver while the highest demand is coming from China, India, the Middle East, and Turkey.

What is Dore?

Gold and silver, whose purity and standard are not determined as rare materials extracted from mines, are called dore, and although the ratio varies, generally 80% of them is pure gold or silver. Mines in this form cannot be bought and sold in international markets since the amount of pure gold or silver is not known precisely. Dore bullions are sold to refineries. The refinery puts the dore bullions into a variety of processes to standardize their purities, weights, and formal properties. How this commercial transaction between the refinery and the mine proceeds depends largely on the commercial agreement between them and the financial capacity of the refinery.

When the refinery melts gold or silver and determines the amount of pure gold or silver in the process called assaying, payment is done. (Sometimes there may also be cases where the refinery pays a certain amount of money to the mine before the completion of the analysis of the gold). The mine can then evaluate this gold in its account according to its preferences. While this is an option, they can sell the net gold amount directly to the refinery in exchange for a currency.

Are There Any Accepted Standards of Gold and Silver Bullions?

Yeah. The most current standard nowadays is the standards set by the London Bullion Markets Association (LBMA) and the bars produced in strict accordance with these standards are called Good delivery bars. The gold bullion produced according to these standards must be at least 99.5% purity (the remaining consists of metals other than gold) and it must have a weight in the range of 350-430 oz. (This corresponds to 12.5 kg). And the stamp, purity, serial number, year of manufacture of the refinery on which the bar is produced must be included. Good delivery silver bullion must have a value of at least 99.9% purity, a weight of 750-1100 troy ounce, and the stamps on which the size and characteristics of LBMA sit should be specified.

Another important standard is the guideline that regulates the principles that must be adhered to in the supply chain of precious metals published by the OECD in May 2011. According to this guideline, each institution has to take maximum care and measures to ensure that the metals that are subject to human rights violations and financial offenses are not involved in the trade chain when trading precious metals.

Savaş Ateş

I like reading books. I like to read about jewelry too. After reading a lot of books about it, I have started to visit jewelry manufacturers and stores. It is my number 1 hobby.

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