Knowing the market price of a gemstone is an absolute must before you commit to a purchase. Failure to understand gemstone pricing before you buy can leave you stuck with a stone that is worth only a fraction of the price you paid. But with a keen understanding of a gemstone's worth, you can sniff out a bargain priced stone that you can cherish forever or resell for a handsome profit.

How much do gemstones cost?

Whether you are looking for a gemstone to cherish and pass down to your children, or you would like to try your hand at buying and reselling precious gems, you need to have cash on hand to complete your first purchase.

But exactly how much capital do you need to invest in a gemstone? The answer depends on a variety of factors related to the stone's aesthetic appearance, historic importance, and current market demand. In general, there are six factors that influence a gemstone cost:

  • The type of gemstone
  • The condition or aesthetics of the gemstone
  • The gemstone's certification
  • The current demand for a stone
  • The country where the stone was sourced
  • The impact of industry trends 

How do these factors combine to influence price?

Any one of the six factors above can impact the cost of a gemstone. But when multiple factors combine to influence pricing, you may end up paying more or less than you typically would for a gemstone. For example, consider alexandrite (already a rare and valuable stone), which typically ranges from $2,500 USD to $15,000 USD up to a maximum of $70,000 USD per carat.

You can expect to pay a price on the high end of the spectrum if the stone is certified, originated in Russia (where alexandrite was originally discovered), and has a precise cut with very few inclusions. On the other hand, you can expect to pay less for rough cut alexandrite with inclusions that originated in Brazil. Below is a closer look at each of these factors and how they influence the gemstones cost.

Gemstone Type

"What is the most expensive gemstone in the world? In 2020 it's a blue diamond costing nearly $4 million per carat, besting the previous holder, a Pink Star diamond a $1.2 million per carat." - Jenny Chang, Finances Online Gemstone price varies widely according to the type and colour of a stone. For example, amethyst and citrine are examples of lower-priced gem types that sometimes have starting prices at under $100 USD per carat. This is just a tiny fraction of the cost of the extremely rare blue diamond, which costs nearly $4 million per carat.

Gemstone Aesthetics

Of the six factors in this list, aesthetics often play the most significant role in gemstones cost. And in the gemstone industry, a stone's aesthetics or beauty is assessed according to its Colour, Clarity, Cut, and Carat (commonly called "The 4 Cs"). If you have ever purchased or received an engagement ring, then you are likely familiar with "The 4Cs" and how they impact the price you pay:

  • Colour: In general, price tends to increase with a rich, desirable colour. Stones that are too light or dark in colour tend to be lower priced.
  • Clarity: Gemstones that possess only tiny fine inclusions will command a higher price than those with multiple pronounced inclusions.
  • Cut: Precisely cut gemstones that reflect the maximum amount of light tend to have a higher price than rough cut stones.
  • Carat: Generally speaking, larger gemstones are more valuable than smaller ones, assuming the colour, clarity, and cut are similar.

In addition to the 4Cs outlined above, there are two other factors that play a critical role in a gemstone's aesthetics and pricing. These factors are country of origin and treatment. In fact, Sondra Francis, who is a founding member of the International Colored Gemstone Association, states that, "Country of origin could be the fifth 'C'." Francis cites Colombian emeralds and Burmese rubies as examples of gemstones that will command a premium price if their country of origin can be authenticated. Treatment can also have a dramatic impact on aesthetics and the gemstones cost. Treatment involves a procedure such as coating, dyeing or heating that can improve a gemstone's appearance or durability. In most cases, treatment can boost the price of a gemstone. Because it can be extremely difficult to determine whether gemstone treatments were used, it is important for any known treatments to be outlined to the buyer.

Gemstone Certification

A breathtakingly beautiful gemstone at an unbelievably low price can cause a novice buyer to ignore a gemstone's certification. This can prove to be a costly mistake, as most seasoned buyers will not purchase a gemstone without first seeing authentic validation of its colour and clarity. In most cases, experienced buyers will expect to see an official document issued by a licensed gemological laboratory. Here are three ways that gemstone certification can influence pricing:

  • Official Identification: Certification adds to the value of your gemstone because it can help you identify your gem if it is stolen or lost.
  • Quality Assurance: A certificate issued by an accredited institute will help verify your gemstone's worth if you opt to sell it.
  • Boost Resale Value: Your official certificate will help you command a higher price if you decide to resell your gemstone in the future.

A final point to consider with gemstone certification is the certifying agency. You can expect to pay more for a gemstone certified by the Gemological Institute of America (GIA) or The Gubelin laboratory in Switzerland. In turn, certification by one of these institutes will allow you to command a higher price for your gemstones cost in the future.

Supply and Demand

"Less than five percent of turquoise mined worldwide has the characteristics to be cut and set into jewelry. Once a thriving industry, many Southwest mines have run dry and are now closed. Government restrictions and the high costs of mining have also impeded the ability to find gem-quality turquoise." - Saba Naseem,Smithsonian Magazine

Sometimes external variables play a key role in gemstones cost. Supply and demand are two of the most critical variables that can impact a gemstone's price. When a gemstone becomes scarce due to mining challenges, you can expect to pay more for stones as buyers scramble to purchase available pieces on the market. This is especially true with Kashmir sapphires, but not always the case as with Thai sapphires. A holistic view has to be taken when assessing scarcity.

Country of Origin

The country where the gemstone was sourced can affect its market price. For the most part, gemstones sourced from East Africa (Tanzanite and Diamonds), Sri Lanka (Sapphires), Myanmar (Rubies), and Colombia (Emeralds) carry a higher value due to the originating country's reputation as a source for high quality precious gems. But it is not always possible to obtain proof of a gemstone's country of origin. Obtaining certification is a good start, as some institutes will offer a statement regarding their opinion about a gemstone's country of origin. However, with some gemstones, there is no way to be absolutely certain about their country of origin.

Industry Trends

"Hardly anyone seemed interested in investing in spinels just five years ago, but after some excellent price growth, and benefitting from an elevated profile fuelled by the popularity of candy-coloured designer jewellery collections, they are now considered worthy investment gems. ...Collectors tip neon pink-red spinels from Tanzania as having the best investment potential, at a cost of up to US$50,000 per carat." - CNA Luxury

Sometimes sudden purchasing trends can cause the price of a gemstone to skyrocket. Such buying trends are often difficult to predict, but you can boost your chances of capitalizing on them by keeping a close watch on industry pricing and remaining on the cutting edge of the latest fashion trends. Purchasing when prices of a particular stone begin to steadily climb can put you on the fast path to gemstone investment success.

Can you increase the value of a gemstone?

Yes! One of the best things about investing in gemstones is the ability to increase your potential profit. In most cases, this goal is achieved by perfecting the condition or aesthetics of a gemstone to make it more visually appealing to prospective buyers. The International Gem Society (IGS) outlines two ways to boost the value of a gemstone:

1) Set your gemstone to create a piece of jewellery

The demand for finished gemstone jewellery is greater than the demand for loose gemstones. So if you are willing to learn how to set stones and create wearable jewellery, you can increase the value of your investment. If you lack the skill or time to invest in the finishing process, you can seek the services of an experienced jewellery designer who can turn your loose gemstone into a custom dream jewel.

2) Re-cutting or repairing your gemstone

"With an investment of labor, a lapidary (gem cutter) can turn low-value rough into high-value finished gems. The trick here is to buy your rough at a price that allows enough markup to justify your labor and learning to cut in a reasonable amount of time. If you're not "cut out" to be a lapidary, you can have others do the work for you." - International Gem Society (IGS) Many people are unaware that they can have their gemstones cut to order by a certified professional. A trained gem cutter will have the professional tools and factory resources needed to cut your gemstone to within a tolerance of 0.02mm. Most importantly, a skilled professional can transform a rough gemstone into an impeccably beautiful adornment.

What is the single best path to a profitable gemstone investment?

As outlined above, there are many factors to consider when purchasing a gemstone. The single best way to ensure that you buy a beautiful, authentic gemstone is to shop only at the most trusted gemstone store in London. We invite you to contact us at Haruni to discover why investors across the UK turn to us for high quality gemstones.

With over seven decades of expertise, the Haruni family has delivered the professional, educational purchasing experience that serious gemstone investors deserve. We look forward to serving as your trusted gemstone expert!

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Tags: Gemstones