A diamond's clarity is the main factor in determining its price. Clarity refers to the number of imperfections in a diamond and how easily you can see them. Imperfections are categorized as "blemishes" if they are on the surface of the diamond or "inclusions" if they are on the inside. The fewer flaws a diamond has the more light is reflected and the more sparkle a stone exhibits.
The Gemological Institute of America (GIA), which sets the worldwide standards for diamonds, set up the following scale for judging a diamond's clarity: flawless, internally flawless, VVS1, VVS2, VS1, VS2, SI1, SI2, I1, I2, I3. In a flawless diamond you can't see any imperfections under 10X magnification. An I3 diamond has obvious flaws that are visible to the naked eye. For most people, a VS or SI diamond is more than adequate. While technically imperfect, you cannot tell these diamonds are flawed unless you look at them under a microscope, and they are significantly less expensive than their counterparts higher on the scale. In fact, when set in a ring and viewed by the naked eye you probably won’t be able to tell the difference.
Color
Diamonds can range in color from colorless (clear) to a faint yellow. The more colorless the diamond, the more expensive it will be. The scale to judge color created by the GIA is a follows:
DEF=colorless
GHIJ=near colorless
KLM=faint yellow
NOPQR=very light yellow
STUVWXYZ=light yellow
Fancy light, fancy, fancy internal=yellow
Obviously, the closer you are to D the more expensive the rock will be. As with clarity, however, you probably won’t be able to tell the difference between a D and a J when they are set in rings, and a J is far less expensive.
Cut
The cut refers to the diamond’s shape. Diamonds come in many shapes, such as the round and oval cuts, the princess and emerald cuts, square cuts, pear cuts, and so on. While cut is largely a matter of taste it also contributes to a diamond’s value. The angles of a diamond’s cut are a large factor in determining how much it sparkles, and sparkle is what determines the price tag. When light enters a diamond, the angles of the diamond’s cut bounce that light around and cause it to sparkle. How can an average consumer tell whether a diamond is cut at the right angles? The easiest way is to look at a diamond’s ability to sparkle. The more sparkle, the better the cut.