The price of diamonds, di Marcello Manna

The most precious and most transparent material in the world has had its strongest trade advantage in its non-transparency and information asymmetry. Point of “strength” for those who had the knowledge of the value and price; point of “weakness” for unskilled operators and customers.

You surely remember the famous advertising campaign “a diamond is forever” that since 1948 has been in the media all over the world to promote the knowledge of the product and its commercial diffusion. The leading company De Beers decided to force the entire supply chain to prepare itself to meet the demand coming from the public pushed by the famous slogan to buy diamond.

In the post-war period the problem was the incompetence and lack of preparation of the sellers who, not knowing diamonds, could not sell them. Also today is not unusual to meet sellers or jewelers who do not distinguish a glass from a diamond.

After 1990, gemological report came from the USA (also known as “certificates”) that changed the way of selecting and selling diamonds: no longer in parcels, but sold in individual pieces and possibly sealed for greater customer safety. The system to reach a value for a polished diamond was edited in 1953 by the GIA (Gemological Institute of America) which still today attributes the most prestigious academic title in the world in the gemological field of Graduate Gemologist of which I’m proudly awarded. The GIA is a nonprofit training institution and was founded in 1931 in Los Angeles by jeweler Mr. Shipley with his savings, which he considered not possible that the jewelers did not have the basic knowledge to recognise and evaluate a precious stone.

A gemological report must refer to the international classification standards introduced by the GIA that can be summarised in the famous 4 “C”: CUT (Cut), CLARITY (Purity), COLOR (Color) and CARAT (Weight).

Gemological report is not an appraisal, but it is a tool for a skilled and professional trader to have a market price and it works similar to a financial rating agency. So, important notice for those who buy a jewel or a gem for investment purposes, the gemological report must be authoritative and internationally recognised, otherwise when you decide to resell your diamond or coloured stone, you could have an unexpected bad surprise!

Knowledge and transparency should not remain abstract in an industry that moves so much money. That’s why in 2002 was subscribed the Kimberley Process Scheme under the aegis of the UN, an agreement between the major countries involved in the production and trade of diamonds to safe workers’ conditions at production sites and to preserve the trade from dangerous infiltrations of illicit traffics.

If the first part about quality of diamond could be reached with the delivery of the gemological report to the customer, the question of price remains unsolved: where is the price of diamonds?

In 1970, Martin Rapaport had the genial intuition to formalise what took place every day in the trading halls of the 3 most important Diamond Exchanges at that time: Antwerp, Tel Aviv and New York. Until that day, the prices were right only for the local market and what was true in Antwerp did not correspond to New York.

The problem was how to code the price of the approximately 16,000 qualities patented by De Beers and make it easy to use?

After a few years he found the system and, since then, every Thursday afternoon the whole diamond industry waits to read the “list” (Rapaport Diamond Report) to buy and sell their diamonds. This price list is not public, but it is reserved for professionals who subscribe and pay the service.


As internet came, this little monopoly in the diamond industry has many attacks, but not to Rapaport Company, but to those who hide it. In fact, if there are several attempts to compete with the Rapaport price list or to imitate it to undermine its power, the most important consequence is in favour of the customers. If the final consumer arrives to this price list, he would be able to obtain the second key to determining the price of the diamonds.

So, when you are buying a diamond, always ask what difference is offered respect to the current Rapaport price list, so as to evaluate the convenience of the purchase.

Many operators in the large jewelry market are part of a world that no longer exists and, to admit it, would be the first step to move from the depressing concept of “crisis” to the more positive “change”. That’s why also De Beers has opened in New York the service to sell second-hand diamonds.


The exit from the market of not transparent sellers that produce and / or sell without making profits, will favours the emergence of a more efficient market with right margins for traders who will resist. This process of renewal, thanks to the internet, continues and today everything seems to be going in the right direction of transparency both in commercial transactions and in accounting to comply with the strict regulation reserved for operators in the diamond market.