Grading and Pricing of Gemstones

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Years ago, the world generally referred to two types of gemstones -- precious and semiprecious. Diamonds, rubies, emeralds, sapphires (and sometimes opals and pearls) were considered precious, and all other stones, semiprecious. Today this distinction is obsolete and meaningless, since poor examples of the so-called "precious" stones can be bought for just a few dollars per carat, while fine specimens of so-called "semiprecious" stones such as tsavorite (a green garnet) or tourmaline (especially Paraiba tourmaline) may sell for thousands of dollars per carat. Clearly, the old terms are inappropriate in such situations. (Besides, the term "semiprecious" always seems to have a connotation of "semiworthless" and seems disrespectful of gemstones that are highly desirable in their right.) Today, the gem market is roughly divided into two separate domains -- diamonds and colored stones. Even this distinction is arbitrary and misleading, since many diamonds are colored and many "colored stones" are not. However, the same basic principles are involved in grading gemstones of both types.

You have undoubtedly heard of the "4 C's" -- color, clarity, cut, and carat weight. Organizations such as the Gemological Institute of America (GIA) and CIBJO (Confederation Internationale de la Bijouterie, Joaillerie, Orfevrerie, des diamants, perles, et pierres precieuses ) have well established, widely respected standards for judging these qualities in diamonds. However, there are no similarly accepted standards for judging other stones, although several systems enjoy limited success.

One major difference between the diamond and colored stone markets is that the diamond market is largely controlled by one organization -- De Beers Consolidated Mines. Through their near-monolithic control of diamond mining and distribution, this company has done much to create a fairly stable market for diamonds, and relatively small diamonds are readily available in a wide variety of qualities. In contrast, most colored stones are mined with more primitive methods, by much smaller companies, and supplies are much more variable. Many colored stones are much rarer than diamonds of comparable size and quality and are often unavailable. A sizeable deposit of a stone may be discovered and quickly distributed to the market, only to become scarce again in a couple of years. Such uneven supply and less regulated distribution often contribute to wide price variations.

The following general rules apply to all gemstones:

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