Garry Holloway's Key Points • Natural diamonds will become more expensive, which means that consumer confidence is crucial. • Diamond grading reports are flawed and must be improved to ensure consumer confidence in the industry. • As an industry leader, the GIA needs to step up and improve its game, particularly in diamond grading reports. |
Six years ago, when Jeweller most recently hosted the Great Diamond Debate, I suggested that anyone blaming lab-created diamonds for the woes of natural diamonds was misguided.
Lab-created diamonds were always going to be here to stay. The natural diamond industry has consistently done a better job of harming itself than any of its supposed competitors.
I’ve also been consistent in my belief that you should never bash the competition, and that telling consumers they are foolish for choosing one product over another is a losing strategy.
It’s easy to see that 80 per cent of natural diamonds are purchased by 20 per cent of consumers, typically those who are wealthy.
It’s also easy to accept that 20 per cent of consumers who purchase a lab-created diamond today may one day become wealthy and wish to upgrade to a natural diamond.
This is hardly a unique phenomenon among consumers! Chances are, the vehicle you drive today is more expensive than the first car you ever owned. The same could be said of home ownership – most people start small and upgrade to a larger house as their careers and incomes improve.
Younger consumers have lost interest in natural diamonds due to cost-of-living pressures and, to
a lesser extent, environmental beliefs. The demand for natural diamond rings has decreased.
This has led to a steady decline in wholesale prices of between 30 and 40 per cent over several years. As a result, a few diamond mines have closed, while others have laid off staff and planned to
retire mines early. Several of those miners are facing financial difficulty, and prospecting has ground to a halt.
When prices fall and supply declines, eventually a tipping point is reached, and prices begin to rise. Add to this equation that smaller and lower-quality diamonds, which are far more abundant, typically make up around half the value of a mine’s output.
These smaller, lower-quality diamonds have been more likely to have been replaced by lab-created diamonds. In the future, there will be a real shortage of larger, high-quality commercial diamonds because the smaller diamonds have fallen in value the most.
Despite what some people may believe, I love anyone who loves diamonds, even those who choose to buy and sell lab-created diamonds.
With all that said, I think that the ‘natural diamond camp’ must focus on repairing and improving its own processes and issues before worrying about the impact of lab-created diamonds.
The key objective should be to improve consumer confidence in natural diamonds, beginning with honest diamond grading reports, also known as certifications.
In recent years, the International Gemological Institute (IGI) has all but taken over the lab-
created diamond grading business. Meanwhile, the Gemological Institute of America (GIA) has all but divorced itself from lab-created diamonds.
Case Study: A Dull Diamond
The GIA is an invaluable organisation and resource in the gemmology and jewellery industry.
As the leading grading body for natural diamonds, it must bear the responsibility for consumer confidence.
As the organisation explains on its website: “the GIA’s mission is to ensure the public trust in gems and jewellery by upholding the highest standards of integrity, academics, science, and professionalism through education, research, laboratory services, and instrument development.”
It goes without saying that any changes to the 70-year-old grading system run the risk of unintended consequences, especially in the litigious society we live in today. The changes I propose in this article must be carefully considered to avoid negative outcomes.
With that said, the current grading system is so flawed that I wrote a book – How To Select The
Best Diamonds (2024) – highlighting these issues to help consumers and retailers.
With that in mind, consider the following example of a diamond and its accompanying GIA grading report. This ‘cert’ is likely to mislead retailers and consumers.
The first thing to note is that the diamond is ‘milky’ or ‘hazy’. Those experienced with high-definition diamond videos, made by stitching hundreds of still photos into a movie, will likely agree.
Furthermore, the seller noted that this stone is “Light Milky” on the RapNet business-to-business trading platform.
When a diamond has reduced transparency, the GIA grading report comments section usually states: “Clarity is based on clouds not shown” and “Clarity is based on Internal Graining not shown”.
Indeed, this diamond has strong internal graining; however, there are no such comments made in
this grading report. There is no warning to a buyer that this diamond is, for lack of a better term, dull and lacks sparkle.
Second, the depth of this diamond is 63.4 per cent. The GIA has stated that the maximum depth of an excellent-cut graded diamond is 63 per cent of its average diameter.
Consumers wishing to sell such a diamond at some future time will discover that most trade buyers would reject their diamond.
Third, diamonds with greater depth percentages are smaller for their carat weight. Deep diamonds return less light near the edges or periphery, so they look even smaller still.
As a fourth point, deeply cut slightly tinted diamonds show more colour when viewed face-up than ‘ideal’ proportioned diamonds of the same color grade.
This diamond likely faces up a colour grade lower than the grade assigned based on its upside down or pavilion colour assessment.
An additional colour grade performed face up on a report would benefit consumers.
Finally, I traced this actual diamond to online vendors and affiliate businesses selling it.
While sellers naturally try to show products in the best light, I would ask readers, based on the stone’s grading report, if they believe that this diamond has been fairly portrayed to consumers.
Reduced Transparency
GIA grading reports do not mention diamond transparency as a characteristic.
Diamonds in the very slight to slightly included (VS-SI) clarity category with reduced transparency
most commonly have scattered and widely disseminated clouds or internal graining that are not easily visible with ten times magnification.
As mentioned, this is usually notated in the comments section, lower left on a report: “Clarity is based on clouds that are not shown” and “Clarity is based on internal graining that is not shown”.
The use of such terminology could be classified as ‘jargon’: special words or expressions used by a profession that are difficult for others to understand.
Savvy trade buyers and sellers know that the GIA downgrades the clarity of milky hazy stones, and this is reflected in reduced business-to-business (B2B) prices.
However, many online and brick-and-mortar sellers offer these diamonds as ‘lucky finds’. They appear to have fewer inclusions than expected for their grade, potentially leading to misinterpretation.
This lab practice has increased the number of dull milky diamonds being polished and sold.
A solution would be to add a transparency grade that would prevent unscrupulous sellers from taking advantage of consumers.
Interestingly, the manufacturer noted this diamond as milky on the RapNet B2B diamond trading platform. There is a drop-down menu for self-reporting milky grades, ranging from none to light, medium, and heavy.
Many manufacturers use this drop-down to maintain trust when dealing with regular clients. As always, it’s important to remember that around 90 per cent of the world’s diamonds are cut and polished in India.
On 21 October 2024, 2.83 per cent of diamonds listed on RapNet in India were declared by the vendors as milky as compared with 0.64 per cent in the rest of the world.
There are many other examples indicating that Indian companies, for lack of a better term, have more integrity than wholesalers in different countries further down the diamond pipeline.
Several large online vendors, that I have audited, also do not pass this milky information on to consumers. This included the very large business-to-consumer (B2C) company that sold the diamond I have discussed as an example.
It is worth noting that, along with the deletion of milky notation once diamonds are on-sold from India, high-resolution 360-degree videos rotating around a vertical axis are often no longer available. Consumer or B2C videos are lower resolution and shot with the stone resting on a pavilion facet, making inclusions and features harder to see.
Excellent Cut Diamonds
As mentioned previously, at 63.4 per cent depth, this diamond is deeper than the GIA’s self-proclaimed maximum depth of 63 per cent to be graded as ‘excellent’ cut quality.
The calculation for diamond depth percentage is simple, and the actual result is always displayed
in the centre of the GIA proportion graphics:
Depth divided by average diameter, rounded to
0.1 per cent.
• 6.29 + 6.38 = 12.67 / 2 = 6.335mm
• 4.01 / 6.335 x 100 = 63.3 per cent
The 0.1 per cent difference is presumably due to measurement rounding.
Naturally, one must ask why the GIA doesn’t comply with its own standard. The stated reason is strange: The GIA Facetware cut-grade software adds crown height, girdle thickness, and pavilion depth to arrive at a total depth percentage.
These are respectively 15 per cent, 4 per cent and 44 per cent, adding to a total of 63 per cent; however, these figures are rounded to 0.5 per cent.
The GIA actually reports the depth as 63.4 per cent.
I ‘blew the whistle’ on this scheme in 2019, which led to an article in Rapaport Diamond Magazine.
“That said, the fact that there are around 37,000 diamonds on RapNet with a depth ranging from 63.1 per cent to 65 per cent and an Excellent GIA cut grade has prompted some, like Holloway,
to voice concern,” the report noted.
The article includes an explanation from a GIA representative of the inaccurate method of “estimating” total depth percentage, as mentioned.
On 21 September 2025, there were 47,767 GIA excellent cut quality round brilliant cut diamonds from 63.1 per cent to 64.3 per cent depth listed on RapNet. Sadly, this is 7.3 per cent of the total.
As an additional point, diamonds with greater depth percentages measure and face up small
for their carat weight. Deeper cut diamonds leak more light with less returned as brilliance and sparkle.
Not only do they spread or measure smaller, but the reduced light return is most noticeable at the edges or periphery of the diamond, resulting in an even smaller apparent size or spread.
On the Holloway Cut Adviser (HCA), the best cut diamonds score below 2.0, and the worst score 10.
The diamond used as an example in this article scores HCA 5.0 and appears small for its carat weight.
Any consumer wanting to sell one of those diamonds will be sadly disappointed by the industry’s refusal to consider the stone.
Six years later, the GIA still has the hen house door open. Clever cutters are taking advantage of this glitch to increase profits at consumers’ expense.
Cut Quality & Face-Up Colour
The GIA developed the D-Z colour grading system in the 1950s, grading the colour through the pavilion.
However, the face-up colour of poor light performance diamonds can be substantially more apparent than the upside-down colour grade. Much larger diamonds also often face-up lower in colour than their lab-assigned colour grade.
Consumers want to know the colour they will see in a diamond when it is set in jewellery, not what it looks like through the pavilion!
It is difficult for a human to assess a diamond’s body colour face-up, through the table, because of the distracting sparkles. However, digital grading instruments can be designed to perform this task.
Today, the GIA diamond grading lab, and likely all other labs, use colourimeters to colour grade almost all diamonds. Digital colour grading instruments have been designed to grade pavilion colour.
Designing an instrument for face-up colour grading should not be a problem.
Surely it is possible for labs to offer both the traditional upside-down and a face-up colour grade.
Improved Fancy-Shaped Cut Quality
There would be an unexpected benefit to providing a face-up colour grade, especially concerning fancy-shaped diamonds. Fancy-shaped, near colourless diamonds with better cut quality face up whiter. This can drive a commercially aligned improvement in cut quality.
In the absence of the GIA’s cut quality gradings for fancy shaped diamonds, there is a ‘Wild West’ like opportunity for diamond cutters.
They are free to produce diamonds that achieve a high carat weight yield from each rough diamond, resulting in poor brilliance.
The better a diamond’s light return, the more sparkle, and the better the face-up colour. Adding a face-up colour grade will incentivise cutters to produce sparklier diamonds because they can sell a better-looking diamond for a higher price.
In almost all fancy-shaped diamond cuts, there are parts of the stones that have some crushed ice zones that show more colour. Ovals, pear shapes, and marquise shapes, for example, concentrate colour in the regions halfway
between the centre and the tips. Even most emerald cuts have smaller virtual facets around the corners.
Proposed Solutions
Trust is a vital factor in selling diamonds and diamond jewellery. The industry has a responsibility to advise, and in some cases, warn consumers of an individual diamond’s qualities and deficits.
That is why consumers demand grading reports when buying diamonds. This would add value to more desirable diamonds. Giving the same colour grade to a diamond that faces up with a less desirable colour devalues superior stones.
To gain trust and consumer confidence, labs should grade face-up colour and transparency.
As noted, the GIA is a vital organisation and an essential resource for the diamond, gemstone, and jewellery industry. Altering a grading system that has been in place for 70 years carries the possibility of unintended consequences, particularly in today’s highly litigious environment.
With that said, the GIA is the organisation capable of introducing changes to convey information
about individual diamond characteristics more honestly for consumers. If the GIA were to implement such changes, consumers and honourable retailers would demand natural diamonds with GIA reports. This could force other diamond grading labs to adopt similar standards.
This is important to understand, because in reality, should they be so inclined, there is very little that natural diamond ‘supporters’ can do to tackle lab-created diamonds.
Complain all you like, lab-created diamonds are here to stay. You don’t change anyone’s mind by bashing the competition. This is especially true for lab-created diamond consumers, who will not suddenly begin to desire natural diamonds more often as a result of this approach.
Instead, it’s essential to acknowledge that many lab-created diamond consumers may one day wish to upgrade to natural diamonds.
When that day comes, the natural diamond industry must be ready to ensure that these consumers will be confident in their purchase - and that begins with strong diamond grading reports.
The key to securing a brighter future for the natural diamond side of the jewellery business is to improve practices, such as diamond grading reports, to ensure consumers feel confident when shopping for jewellery, and that natural diamonds remain an appealing option for generations to come.
THE GREAT DIAMOND DEBATE III
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