Diamonds and platinum are two of the most valuable and coveted materials on Earth. Both have been used for centuries as symbols of wealth, power and prestige. But which of these precious materials actually costs more?
The relative costs of diamond and platinum depend on factors like carat weight, clarity grade, color grade for diamonds and purity level for platinum. By looking at current market prices, we can get a sense of which material commands higher prices in its purest forms.
This article will examine the cost determinants of diamond and platinum. We’ll look at price differences based on carat, color, clarity for diamonds and purity level for platinum. Tables visualizing price data will help illustrate the cost comparison. By the end, you’ll understand whether diamond or platinum generally carries a higher price tag.
Determinants of Diamond Cost
Several factors determine the monetary value of diamonds. These include:
Carat
The carat refers to a diamond’s weight. One carat equals 0.2 grams. Larger diamonds are exponentially rarer, and prices skyrocket with carat size. The table below shows average price per carat in 2022 for round cut, G-color, VS2-clarity diamonds at different carat weights:
| Carat | Average Price Per Carat |
|---|---|
| 0.50 | $3,250 |
| 1.00 | $6,300 |
| 1.50 | $10,500 |
| 2.00 | $16,900 |
| 5.00 | $76,600 |
As the table illustrates, price per carat rises substantially as diamond size increases. At 5 carats, diamonds fetch over $75,000 per carat.
Clarity
Diamond clarity refers to the absence of inclusions and blemishes inside the stone. The fewer imperfections, the higher the clarity grade. Diamonds with flawless clarity are incredibly rare and command the highest prices. The table outlines how clarity grade impacts 1-carat diamond prices on average:
| Clarity Grade | Average Price (1 Carat) |
|---|---|
| FL (Flawless) | $22,000 |
| IF (Internally Flawless) | $15,500 |
| VVS1-VVS2 (Very Very Slightly Included) | $12,000 |
| VS1-VS2 (Very Slightly Included) | $8,600 |
| SI1-SI2 (Slightly Included) | $5,000 |
| I1-I3 (Included) | $2,200 |
Diamonds with higher clarity grades command substantially higher prices. A 1-carat internally flawless (IF) diamond costs nearly 8x more than an included (I1-I3) diamond of equivalent carat weight.
Color
Colorless diamonds are more valued than colored diamonds. Grades D-F represent colorless stones, with faint yellow hues emerging at grades G-J. Intense yellow tints are graded K-Z. Here’s how color impacts 1-carat diamond prices:
| Color Grade | Average Price (1 Carat) |
|---|---|
| D-F (Colorless) | $12,000 |
| G-J (Near Colorless) | $9,500 |
| K-M (Faint Yellow) | $7,000 |
| N-R (Very Light Yellow) | $5,000 |
| S-Z (Light Yellow to Yellow) | $3,000 |
While less impactful than carat and clarity, diamond color still influences prices considerably. A 1-carat colorless diamond might cost 4x more than an equivalent carat diamond with a light yellow tint.
These factors – carat, clarity and color – make up the 4Cs that determine diamond value. Next, we’ll examine what impacts the price of platinum.
Determinants of Platinum Cost
Platinum value depends heavily on:
Purity
Platinum is one of the rarest metals on Earth. It typically occurs in deposits with 5 grams of platinum per ton of ore. This makes extracting pure platinum challenging. Platinum used for jewelry and bullion is 85-95% pure. Higher purity commands higher prices. Current platinum prices by purity level are:
| Fineness | Price Per Gram |
|---|---|
| 99.95% | $57 |
| 99.90% | $56 |
| 99.50% | $52 |
| 95.00% | $30 |
As the table shows, platinum with 99.95% purity fetches nearly double the price per gram of 95% platinum. The highest purity platinum commands the greatest value.
Market Demand
As a rare precious metal, platinum relies heavily on market demand to influence its price. Investment demand and industrial uses can cause large price swings. For example, platinum hit $2,300 per ounce in 2008 when investor demand surged during the financial crisis. Recessions tend to drop platinum prices as industrial activity declines. The white metal traded under $800 per ounce in 2020 amid pandemic slowdowns.
Supply Constraints
Over 90% of the global platinum supply comes from just two countries – South Africa and Russia. This concentrated production leaves platinum vulnerable to supply disruptions. Geopolitical conflicts, labor strikes, electricity shortages and other localized events can constrain output and lift platinum prices. In 2019, a major processing plant shutdown helped push platinum over $1,000 per ounce when supply dropped.
Unlike with diamonds, there are no quality grades for platinum. The purity level determines the price per gram. Rarity and difficulty extracting the metal ensures platinum carries a high inherent value.
Next, we’ll directly compare diamond and platinum prices.
Diamond vs. Platinum Pricing
To determine which precious material is more expensive, we’ll look at current prices per carat and per gram:
| Material | Price Per Carat/Gram |
|---|---|
| 1 Carat D-F VS2 Diamond | $6,500 |
| 1 Gram 99.95% Platinum | $57 |
Diamonds fetch dramatically higher prices per unit than platinum. A 1-carat high quality diamond might sell for $6,500 while 1 gram of 99.95% pure platinum trades for around $57.
The price gap holds up even with lower grade diamonds:
| Material | Price Per Carat/Gram |
|---|---|
| 1 Carat J SI2 Diamond | $2,500 |
| 1 Gram 95% Platinum | $30 |
A 1-carat commercial-grade diamond still commands a price per carat above the most expensive platinum purity level.
This comparison shows that diamond prices considerably exceed platinum prices per equivalent weight.
Factors Making Diamond More Costly Than Platinum
Several reasons explain why diamonds fetch such high prices compared to platinum:
Diamond Scarcity
Diamonds form under intense heat and pressure around 100 miles below the Earth’s surface. They need to be mined and transported to the surface. Only around 1% of diamonds are of jewelry quality. This makes finding large, high-clarity stones suitable for fine jewelry exceptionally uncommon. Platinum is rare but more abundant than mineable diamonds.
Diamond Demand
Thanks to savvy marketing campaigns in the 20th century, diamonds became a coveted symbol of commitment and luxury. Diamond demand soared as an essential part of engagement rings and other fine jewelry. Platinum has industrial uses driving demand, but no retail branding success equivalent to diamonds.
Ease of Diamond Supply Manipulation
For much of the 20th century, the diamond trade was dominated by a single entity – De Beers. This allowed the cartel to severely control diamond supply and keep prices high. It’s much harder for platinum producers to coordinate on supply restrictions. Diamond prices could be manipulated in a way platinum prices couldn’t.
Functional Utility
Platinum’s conductivity, corrosion resistance and chemical stability give it utility spanning jewelry, industrial applications and investment purposes. While diamonds have some industrial uses, their primary utility comes from jewelry applications. Diamond’s more limited functionality makes its high pricing less justifiable.
In summary, diamond’s extreme scarcity, inflated demand, controlled supply and functional limitations contribute to extraordinarily high pricing. Platinum is far more abundant and functional than diamonds.
Conclusion
When examining prices per carat and per gram, diamonds are significantly more costly than platinum. A 1-carat diamond might fetch over 100x the price of an equivalent weight of platinum.
Diamond prices are elevated by natural and artificial scarcity, inflated demand, and restricted supply. These same market dynamics don’t impact platinum to the same extent. While considered precious, platinum remains far more attainable than high quality diamonds.
Factors like carat, cut, clarity and color grade ensure each diamond carries a unique price. But even lower quality commercial diamonds exceed platinum on a per unit basis. Across the spectrum, diamonds command higher prices than platinum.
So if you’re wondering which is more expensive – diamonds or platinum – the clear answer is diamond. The sparkling white stone carries a hefty price tag orders of magnitude above other precious materials.