AGS – American Gems Society
Established in 1996, the AGS Laboratory's goal was to serve the jewelry market. They were the first to set standards and formulas for the Ideal round cut, also known as AGS Triple Zero. AGS’s terminology is different from other laboratories and it uses number scales to define colors and clarities.
Associations and associated price points
The principle, standard practice in diamond pricing, is that changes of certain price points will be reflected in changes to closely related price points on a number of diamond characteristics. The presence of associated groups in the market means that price movements on some price points can be used to inform movements, typically proportionately, of other price points belonging to the same group.
Mercury Diamond has developed a range of proprietary associated price point tables.
Brilliant Cut vs. Step Cut
In order to enhance the fire and luster of a diamond, most shapes are polished to be brilliant cut. But step cut shapes may still result in stones with light and fire while improving the yield of the rough diamond.
Brilliant Cut: Cuts like rounds, pears, princess. Brilliant cut diamonds have facets that are shaped like triangles and kites. The facets radiate outwards and are positioned so that the light coming through them interplays to enhance the diamond's brilliance, or sparkle.
Step Cut: Cuts like squares and emeralds, step cut diamonds have facets which are more square-like.
Comments and other Irregularities
Beyond the 4Cs, a diamond’s quality and price is determined by comments and other irregularities. These refer to finer diamond characteristics that describe deviations from a top quality stone. Comments and other irregularities drive discounts or premiums to the diamond’s price. The presence of irregularities explains why two stones that have identical 4Cs can still be priced differently.
A list of hundreds of possible comments and irregularities, found on a diamond certificate, are crucial to determining the price of a diamond. Mercury Diamond has developed a proprietary list of more than 400.
Though some minor comments do not impact the price of a diamond, others do. For example, internal graining, which refers to thick white or brownish lines on the stone, or a cloud, which is a cluster of small inclusions invisible to the naked eye that combine to create a cloud effect, or the fluorescence or finish of the stone.
Comments can describe a cloud as small, large or hazy. While a small cloud hardly blocks any light and may not impact the price, a large cloud could result in reducing the brilliance, and price, of the stone.
Criteria is a term developed by Mercury’s experts to describe our technique of evaluating fancy diamond features that are analogous to the cut on a round stone. Round diamonds have a cut grade assessment on the certificate, while fancies do not. Our criteria grade is calculated using the shape market standards, which are the stone’s measurements (length, width and depth), table percentage, and girdle thickness.
Diamond Manufacturing Process
This is the process in which the polisher or manufacturer transforms a rough diamond into a polished one. The process includes five broad steps:
Fancy Cut Diamonds, also known as Fantasy Diamonds
Any diamond that is not round falls into this category. At Mercury Diamond, we divide fancy shaped diamonds into two categories: semi rounds and squares. Semi rounds include marquises, pear shapes, heart shapes and ovals. Squares include emerald cut, cushion, radiant, Asscher cut and princess.
GIA - Gemological Institute of America
The GIA was established in 1950 and is one of the most prestigious diamond grading laboratories.
Grainer is a term used by diamantaires to describe a quarter of a carat – this is sometimes called 25 points (1 carat = 100 points). This term is used for rough and polished stones, and can be used to describe the size of diamonds in a broad way. For example, the term 4 grainer is used to describe a 1 carat diamond.
HRD, or Hoge Raad Vor Diamant (Diamond High Council), was established in 1973 by the Antwerp World Diamond Centre, or AWDC.
IGI – International Gemological Institute
Established in 1975, IGI is one of the leading diamond grading laboratories.
Melee is a loose term for small size rough diamonds of between a quarter and half a carat.
Every mine has its own characteristics in terms of the diamonds it yields. For example, mines in the same geographic region can produce diamonds with similar characteristics. Essentially, every mine has its own fingerprint.
Rough Baseline and Rough Trading Prices
Rough prices are dependent on what the end user will pay for the polished result at any purchase point. We therefore use the price of polished diamonds for a process we call reverse engineering. We call this reverse engineered price the “Rough Baseline Price”:
The Rough Baseline Price: The Mercury rough pricing system takes the expected price of a polished diamond based on variables including model, size, color, clarity and cut, applies the percentage of presence of each of the variables in an assortment of rough diamonds and then adjusts for factors such as the manufacturer’s labor costs and target profit margin. This creates a rough diamond price book that allows, rough buyers, manufacturers and traders to make more considered business decisions whether buying a specific assortment or investing in the whole run-of-mine range.
The rough diamond market also has its own dynamics which give rise to another price level we call the “Rough Trading Price”:
The Rough Trading Price: When demand for a particular product is high, manufacturers rush to produce it. They may opt to accumulate inventory due to market speculation. These factors may push rough diamond buyers, manufacturers and traders to pay a premium to secure the diamonds they want. Conversely, weak market sentiment pulls prices down, enabling them to buy at discount. These phenomena create the Rough Trading price.
The Rough Baseline Price changes according to what end users are willing to pay. The Rough Trading Price changes according to the agendas of rough buyers, manufacturers and traders. The gap between Rough Baseline and Rough Trading prices enables them to make decisions according to their acceptable level of risk. Our Rough Baseline and Trading Price Calculator aids this process.
Round shapes are the most common in the market. A round diamond has 58 facets. The most important measurements on a round diamond are its depth percentage and its table width. Since 2006, the GIA has added the cut grade to its certificates, with a set of rules to determine the cut performance of a round diamond.
Rough boxes are mixed packages of rough diamonds, sealed by rough diamond providers De Beers and Alrosa prior to a sight. Boxes are allocated to sightholders according to their specific market niche.
The term run-of-mine diamonds describes the whole spectrum of diamond sizes, shapes, colors and clarities as well as thousands of different criteria comprising the production of rough diamonds as extracted out of the ore and produced by diamond miners.
Sorting and assessing the value of run-of-mine diamonds requires a vast, in-depth knowledge and expertise only few possess.
This expertise is composed of complete technical comprehension of rough diamonds and a strong understanding of the diamond market at any given time. Run-of-mine valuation has been a subjective matter in the past and it has taken years of experience to render it objective. There are millions of different combinations of size, model, shape, color, and quality in rough diamonds and every minimal movement from one price point to the other can significantly impact the value of a diamond.
Mercury Diamond’s founder, Ehud Arye Laniado, initiated and developed unique systems and techniques to allow valuation to be as objective as possible.
Run-of-Mine Valuation Process
An accurate valuation of diamonds can only be performed after the diamonds are sorted into their different price points/assortments. However, the definition of those price points/assortments may vary from one expert to the other.
Diamond experts use different techniques and different values, based on their experience and knowledge of the market. However, all use their magnifying glasses, known as loupes, fluorescence lamps and diamond color machines, and work their way through the following steps in order to achieve an accurate result:
A physical event, in which sightholders (clients) receive rough boxes from primary sources for examination.
This refers to diamond manufacturers and brokers who are entitled to a steady supply of rough diamonds from primary sources like De Beers and Alrosa.
Treated diamonds refer to stones whose color or clarity has been enhanced by artificial means. Some of the common treatments are HPHT color enhancing, laser drill, or fracture/feather that have been filled with a chemical to improve a diamond’s appearance. Diamantaires are required to disclose all treated diamonds. They trade at much lower prices than non-treated diamonds.
Triple-X (3-X) Grade
This refers to the best cut, polish and symmetry on a round stone. Cut refers to how expertly the stone’s facets have been aligned so the light can bounce off and create a sparkle. Polish is how masterfully the stone’s exterior surface has been smoothed, and the accuracy of the crafting of the stone. Symmetry refers to the proportionality of the finished stone. If the stone’s facets mirror each other, light can enter and leave the stone in a way that creates maximum visual impact. Ex stands for excellent. A triple X stone stands for excellent cut, excellent polish and excellent symmetry and it commands a higher price than, for example, a stone that has a Vg, or very good, cut, polish and symmetry. Fancy shape cuts (i.e. non-round diamonds) are only tested and graded for polish and symmetry and therefore can be categorized by 2X only. There is an ongoing conversation about applying the cut grade to the fancy shapes certificates.
Wow effect is a term we use at Mercury Diamond to refer to the qualities of a diamond that may escape the normal certification process, or may not be fully appreciated by the certificate. For example, in some instances, a stone’s character as described on paper may come together in the physical form in a way that is unexpectedly exceptional to the eye. This may result in a very rare or unique appearance that deserves to command a premium. This wow effect is our way of expressing the stone’s characteristics, such as brilliance, fire and scintillation, which are only observable by physical inspection and which can have a significant impact on value.