EconomICs of Gems

During the past 50 years the values of most gemstones have followed the general trend upwards without the fluctuations of stock exchange. Only with diamonds we have experienced a overheated rise in the 1980's, when one carat reached unsurpassed heights, to fall back to normal three years later. We may still consider gemstones as a tangible asset with a relative resistance to strong fluctuations. Nevertheless nothing can be predicted for the future evolution regarding the continuation of the past positive development, but the development of the economy of newly industrialising countries may give another rise in demand for gemstones. 

A first clarification regarding the price of a gemstone results from the attribution to the category of either natural, synthetic or treated gem material. This spectrum represents a range of at least six orders of magnitude in value. In respect of an estimate of the value of a stone, one has to differentiate between rough or cut stones, as well as between diamonds and colour stones. "Coloured stone" is a term used among professionals for non-diamonds, such as ruby, sapphire, emerald, topaz etc.

Rough stones can, as a consequence of their quality, be worth of cutting and polishing, or not. The latter form the category of minerals and can be purchased cheap at mineral fairs. To evaluate the potential of a rough stone as a gemstone and its suitability for cutting demands a high expertise. Any chunk of stone can technically be cut, but this processing does not forcedly transform the material into a valuable gem. The correct cutting of rough may decide between loss or benefit. Pre-shaping rough and putting the table facet on the right place decides about the final weight and the beauty of a gemstone. With carat prices of thousands of dollars even a weight waste of some fractions of a carat is a painful loss.

For cut diamonds price lists can be consulted (Rapaport Diamond Report), they are periodically upgraded. The price determination for cut colourless diamonds is a straightforward operation as the quality assessment of diamonds is standardised and defined by the 4C's. For diamonds with stronger saturations in any colour (fancy coloured diamonds), prices may develop also into a "fancy" level. Nice fancy coloured diamonds are extremely rare when of natural colour (recognised test report mandatory).

Price estimation for colour stones (ruby, sapphire, emerald, tourmaline or topaz to mention the most frequent) is considerably more complex. In the trade not only the top quality is encountered, but all qualities down to mine scrap is on the market. This fact leads to a drastic increase of variables that so far has prevented the availability of price lists. An internationally recognised system of general quality assessment does not exist.

As most important factors influencing the quality we can mention:


Generally larger gemstones are less frequent and thus more rare. The value of a stone is not linearly proportional to its size. With more valuable material the lowest price class covers stones up to 1 ct. The next category comprises stones from 2 to 4 ct. Stones between 5 and 10 ct are again considerably more expensive per carat. Large gems over 10 ct may reach really high prices.


Size and number of features in a stone. The range covers minute particles invisible by the naked eye up to stones that are intransparent due to inclusions.

Intensity of colour

Saturation from a faint colour down to an opaque stone.

Colour nuances

Variations of colour from stones of different origins. Fashion may have specific preferences.


Specific origins act as brand names. Sapphires and rubies from Burma, emeralds from Colombia or alexandrites from Russia are in higher favour than gemstones with similar appearance from lesser well-known deposits. 

Treatment. Today over 90% of all rubies, sapphires and emeralds in the trade are enhanced. A broad range of techniques are applied to treat the stones for a better appearance. Since natural beauty is more rare than made-up stones, the difference in price can be important. Treatments must be disclosed in any circumstance.