The most important players in the diamond market

Both diamond buyers and sellers should be familiar with the key actors and documents that can help make transactions more secure as fraud can take place in the diamond market as well as in other financial markets.

The diamond's authenticity is confirmed by gemmological institutes.

Gemmological institutes primarily certify diamonds. The document of each of the institutions listed below is a guarantee of the quality and authenticity of the purchased stone.

The most important centres for diamond certification are:

• Gemmological Institute of America (GIA)

• International Gemmological Institute (IGI)

• HRD Antwerp - Hoge Raad voor Diamant (HRD)

GIA - Gemmological Institute of America

• Headquarters in Los Angeles, USA

• Established in: 1931

• Number of laboratories around the world: 10

The world's greatest authority on diamonds.

Established in 1931, it operates as a non-profit foundation and its contribution to the standardization of the grading process for diamonds and other gemstones is enormous. In the 1940s, GIA established the 4C principle and the International Diamond Grading SystemTM, the worldwide standard for diamond quality assessment used by all market participants until today.

IGI - International Gemmological Institute

• Headquarters in Antwerp, Belgium

• Established in: 1975

• Number of laboratories around the world: 18

The world's largest gemmological institute with 18 laboratories located all over the world. IGI is the only global centre that evaluates and classifies not only single colourless and coloured diamonds, but also jewellery.

HRD Antwerp - Hoge Raad voor Diamant

• Headquarters in Antwerp, Belgium

• Established in: 1973

• Number of laboratories around the world: 3

Operates at the High Diamond Council (HRD - Hoge Raad voor Diamant). The main research laboratory is located in Antwerp, the others in Istanbul and Mumbai. The Institute, apart from diamond assessment and classification, also deals with training and production of specialized research and production devices for the industry and global trade of diamonds.

Rapaport Group

An organization founded in 1976, operating in 118 countries, associating over 20,000 customers. Rapaport Group deals with many different areas related to the diamond market. The most famous and valued service is the Rapaport Price List - a wholesale price list of colourless diamonds published every Thursday. It is the main source of information on the price of colourless diamonds in the diamond trade. Widely used by market participants, it is used to estimate the price of colourless diamonds.

The Rapaport Price List does not provide transaction prices, but rather an indication of how the prices of individual colourless stones may develop. The report is the starting point for negotiation and the basis for estimating the value of the diamond. The final transaction prices may differ significantly from those provided by the Rapaport Price List due to the negotiating power of sellers or buyers and the parameters of a colourless diamond itself. The final price will be influenced by the quality of the stone and cut, the interest rate, the specification and location of the market, and the liquidity of the diamond in question. Easier diamonds to sell will have prices close to the list, and more difficult ones to sell will be listed at a greater discount.

Transaction prices may be discounted (below list prices) or premium (above list prices). In the trade of colourless diamonds, transactions are most often concluded at a discount (rebate) compared to the list. Premium prices most often occur in the case of scarce or speculative stones. These are large, very well-cut diamonds. 

Fancy Color Research Foundation (FCRF)

An independent non-profit organization founded in 2014, the aim of which is to promote high ethical standards, transparency and fair trade principles among retailers, wholesalers and the Fancy Color Diamonds mining industry.

Membership in the organization is open to all sellers, auction houses, wholesalers, mining companies, jewellery manufacturers and other entities involved in the diamond market. The most recognizable members are, among others, Chanel fashion house, Christie's auction house, De Beer's colourless diamond tycoon, Rio Tinto mining company and one of the most famous jewellery companies Tiffany & Co.

FCRF provides its members with access to analytical tools, including the Fancy Color Diamond Index, which shows the quarterly change in wholesale purchase prices of pink, yellow and blue diamonds since 2005. There is no other tool that illustrates the price changes in the coloured diamond market so well.

Fancy Color Diamond Rarity Tool is a tool that allows to determine the rarity of yellow, pink and blue diamonds weighing at least 1 carat. Input data comes from gemmology laboratories, FCRF's own gemmology research and surveys conducted among the greatest professionals in the diamond market. 

Transaction security – mandatory gemstone documents

At the time of purchasing a piece of diamond jewellery, it is worth paying attention to four elements that will not only confirm the authenticity of the stone, but also authenticate its origin and ensure the ethicality of its acquisition. These are:

Diamond certificate. It is a document issued by a gemmological institute, e.g. GIA, IGI or HRD. Thanks to it, it is possible to confirm the quality of the diamond you are buying. In this document you can find the most important information about a diamond, including parameters 4C. The certificate confirms the authenticity of the purchased stone. The number on the certificate must match the laser inscription most often found on the girdle. An experienced diamond quality expert will be able to verify that the diamond has not been polished and the number has been changed.

The presence of a diamond in diamond databases maintained by gemmological institutes, which register all certified and labelled diamonds. Due to the presence of a diamond entry in the database, it is possible to verify the authenticity of expert opinions performed by experts.

Diamond exchange and reliable suppliers. Detailed verification of entities makes the diamond market an extremely hermetic environment. It is extremely difficult to get into and easy to be barred from it for breaking ethics in the diamond trade. Cooperation with verified points increases the security of transactions.

The Kimberley Process Certification Scheme (KPCS), introduced by the UN Resolution 55/56. In 2002, a declaration was signed that obliges the signatories to apply the international certification system in the trade in rough diamonds. Its goal is to end the trade in diamonds which come from conflict zones, mainly in Africa.

Graph 1. Example of a certificate for colourless diamonds 

Source: GIA

The certificate contains all the most important information. Below is an interpretation of the attached document.

First column from the top left: 

• The date of issue of the certificate

• Certificate number

• Diamond shape and cutting style

• Measurements (dimensions)

Grading results:

• Mass (in carats)

• Colour

• Clarity

• Cut quality

Additional grading information:

• Polish

• Symmetry

• Fluorescence

• Inscription/s

Middle column (from the top):

• Certificate number

• Proportions

• Inclusions (clarity characteristics)

Right column (from the left):

• Colour grading scale

• Clarity grading scale

• Cut grading scale

Graph 2. Example of a coloured diamond certificate

Source: GIA

A coloured diamond certificate has a similar set of information to a colourless diamond certificate.

The most important information is on the right, under Additional Information - GIA Colored Diamond Scale. From the graph above, you can see how the relationship of saturation, hue and tone affects the overall diamond colour rating that GIA gives.

High security of the diamond market participants

The diamond market, like the financial markets, is a target of fraudsters who are people or companies trying to rob other participants. Fortunately, thanks to the certification and laser inscriptions, the security of the market participants increases. A diamond can be re-certified by one of the reputable gemmological institutions. The stone will then be assessed whether it has been stolen and whether it has been re-polished to change the inscription. The most important thing is to buy stones with a certificate issued by well-known gemmological institutes.

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Fancy Colour Diamonds

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