Posted on by Peak Gems Dot Com

There are several factors that can cause the price of Natural Gems to fluctuate. The following are some of them:

1. Gem variety

2. Color

3. Clarity

4. Carat weight

5. Cut & Shapes

6. Treatment

7. Origin

8. Supply v.s Demand

We will explain briefly how these factors affect the price of Natural Gemstones.

1. Gem variety

Some well known gemstone varieties would  demand a higher price than others.  Examples include ruby, sapphire, emerald, diamond, tanzanite, spinel and alexandrite. However, it should be noted that although the gem variety sets a general price range for a stone, the unique characteristics of each gem would greatly affect the price.

2. Color

The color of a Natural Gem is one of the most important value factor. Different gem varieties have their own ideal color but as a general rule, gems that are intense, vivid and with a medium tone usually are more expensive. You may hear terms like "pigeon's blood red Ruby" or "cornflower blue Sapphire"; these two color expressions represent some of the finer quality rubies & sapphires.

3. Clarity

Clarity refers to the relative degree to which a transparent gemstone is free of internal or surface characteristics. Internal characteristics are commonly referred to as "inclusions" and external characteristics are commonly referred to as "blemishes". Some Natural Gems, such as Emerald, always has inclusions. A perfectly clean Natural Gemstone are  priced at a higher value. 

4. Carat weight

Gemstones are measured in "carat" and one carat is equivalent to 200 milligrams. For some gemstones, the value increases constantly with the weight. However for rarer gems, such as diamonds, rubies and sapphires, the price per carat can increase exponentially as the carat size increases. This means that if a 1 carat gemstone caused $500, a 2 carat gemstone could be priced at $2000.

5. Cut & Shapes

The cut refers to how well the proportions, symmetry and polish are executed to produce a particular gem shape. The cut is important because it affects the gems' color. Well-cut stones bring out the beauty and brilliance more, thus increasing the overall gemstone grade.
Some shapes also tend to be priced higher than others such as gemstones that are "round".

6. Treatment

Treatments are used to improve the appearance of a Natural Gemstone. A treated gem is always less expensive than an untreated gem of equivalent color and clarity. Some of the common treatments that are being used today include heating, fracture-filling, irradiation and diffusion. When you buy an expensive gemstone, make sure to verify from a reliable lab if any treatments were used .

7. Origin

Sometimes, where the gemstones come from can greatly affect the price. Some may wonder how is that possible. The reality of the market is that certain gem varieties from locations such as Burma, Sri Lanka, Kashmir, Colombia and Brazil are valued at a higher price. Therefore you may hear terms such as "Burmese Ruby", "Sri-Lankan Sapphire" or "Colombian Emerald"; these usually are more expensive.

8. Supply v.s Demand

Similar to other commodities, the economics of the gem industry is the same. The price of a Natural Gem would be affected by both its supply and demand. When demand exceeds supply, the value would increase. While, if the demand of a gem is lower than the supply, the price tends to fall. However, if the supply is unreliable and irregular, then prices and demand are unpredictable as well.