A CUT ABOVE® Collection Series – The Rarest of the Rare

Diamond dealers have long had a specific term for diamonds in the colorless (DEF) and microscopically clean (FL-VVS2) grade range - "collection goods". The implication of the term is that these are diamonds that are better than they have to be, above and beyond the quality needed to be simply beautiful. They have a rarity aspect that makes them collectable, like fine art.

Diamonds that grade in the VVS and above range are visually identical to VS1 diamonds, all else being equal, yet are priced considerably higher. This is entirely due to the added rarity of diamonds with elite purity.

The same is more or less true of diamonds in the colorless range – DEF. While some people with very high color acuity can see visual differences among these color grades under controlled lighting, to the vast majority of people all three grades look perfectly white in real world viewing. In fact, many observers see little difference between diamonds in the colorless range and in the near-colorless grades of G, H and even I color.

So why do people pay a premium for upgrades in color and clarity that do not impact beauty? There are a few answers that help to explain this phenomenon. First, for people new to the world of diamonds who want high quality there is a presumption that a VVS must be more beautiful than a VS, and an E color more beautiful than an F. More experienced shoppers may not feel the need to spend the extra money to get a diamond with peak visual performance. Second, there are certain cultural preconceptions about diamonds of the highest color and clarity grades that encourages buyers toward collection quality diamonds. And third, some buyers just want the exclusivity of knowing they have a diamond of elite quality and are willing to pay a premium even though they know they could get by with a lower grade.

But an underappreciated aspect of diamond quality, which is independent of color and clarity and intimately tied to diamond beauty, is the quality of the cut. And as we will see, this factor determines a diamond’s light performance – the optical properties of brilliance, fire and sparkle. Cut quality is also a particularly relevant factor when it comes to collection goods because it also impacts rarity.

Diamond manufacturing (cutting) is a business, and a very competitive one. Each rough diamond crystal is planned according to several factors, but the overriding goal of most cutters is to make the largest decent diamond possible. Since diamond valuation is predicated chiefly on color, clarity and carat weight, technical aspects of cut quality are de-prioritized. If the rough is of decent quality, cutters today will aim for a GIA Excellent cut which is the best grade given by GIA. But this grade is extremely forgiving and cutters can take advantage of this generosity by taking liberties with cut quality.

While a GIA Excellent cut generally results in an attractive diamond, advanced imaging shows that many, if not most, have demonstrable deficits in terms of light leakage and optical precision. Most cutters are not focused on correcting these problems as it does not impact their ability to sell the diamond, and it allows them to retain more weight than if these deficits are eliminated. So, for the vast majority of cutters, retaining as much weight as possible while obtaining a saleable GIA report is the goal. This philosophy is an economic one designed for profit – not for producing the most beautiful precision cut diamond possible. It benefits the manufacturer, not the consumer.

The Venn Diagram below tells the story of what it takes to make A CUT ABOVE® Collection Series diamonds. These diamonds do not happen by accident. It takes the very finest rough that comes out of the Earth, the most skilled craftsmen using state-of-the- art tools and technology, and a philosophy of intention to make the most beautiful diamond possible despite the weight loss incurred. It’s that small “sweet spot” in the middle where all these required elements intersect.

In fact, a huge commitment must be made by any manufacturer willing and able to cut diamonds to this level of precision. They devote more time, commit their finest craftsmen, utilize their most sophisticated tools, and sacrifice finished carat weight in order to produce the ultimate diamond quality. In order for a diamond to carry the A CUT ABOVE® brand it must first be graded AGS Ideal, and then pass all additional qualifications and specifications by the Whiteflash review team including advanced light performance imaging.

When you look at the economics of producing super ideal cut diamonds from collection quality rough you see the enormous financial commitment a manufacturer must make. First we’ll take a look at some baseline wholesale price differences that will illustrate the premium that rarity entails. As noted above, the difference between a colorless IF/VVS and a G VS1 is not visually apparent to most observers. Those with very high color acuity may under certain lighting conditions be able to detect a very slight difference, but for most observers they are equivalent from a visual perspective, provided cut quality is the same. But an E VVS1 in a 1.00 carat size will cost approximately 30% more on today’s market than a G VS1. You will pay a premium of approximately $2500 for the E VVS1, even though both stones essentially look the same. This is almost entirely a rarity premium.

Now, if you throw D IF into the mix the differences are even more dramatic. The cost of D IF compared to E VVS1 (one grade in color and clarity) is another 30% higher. You will pay over $4,000 more today for the 1ct D IF even though the diamonds are essentially impossible to differentiate except by experienced graders working in a laboratory environment.

And you will pay double for the 1 carat D IF over the G VS1 – about $7,000 for visual appearance that very few can see in real world viewing environments! For most shoppers, especially those working on a budget, a premium this large for theoretical quality makes little sense.

From an exclusivity standpoint it is worth noting that this same survey of GIA Triple Ex diamonds on the international database showed over 1,000 G VS1s, only 330 E VVS1 and only 188 D Fl and D IF diamonds combined. As rarity increases, availability (supply) decreases. These numbers reflect stones cut to the relatively broad and forgiving GIA Triple Ex cut standard.

Now let’s look at D IF diamonds and see what happens when elite cut quality is factored in. As mentioned, making an Ideal cut entails greater loss from the original rough. If we assume a 10% loss in yield, the difference between a 1.00 carat and a 0.90ct is a whopping 30% in wholesale value! Today, the 1.00 carat DIF has a wholesale value of $5,000 more than the 0.90 carat. This is the loss of market value that the manufacturer has to be willing to take in order to justify the yield loss to make a superideal.

The fact is that superideal cut diamonds are generally not present in the global databases that most websites and brick and mortar jewelers draw on for their virtual inventory. Only a few manufacturers in the world cut precision diamonds that can be considered super ideal. And they don’t do that with the virtual sellers in mind. They cut specifically for merchants who specialize in providing elite cut quality. In a real sense, if it were not for retailers such as Whiteflash who are committed enough to buy this production for their in-house inventory, and with the proven ability to serve the kind of clients who are knowledgeable enough to care deeply about cut quality, these diamonds would not even exist for the world to appreciate!