The word Carat is derived from the Greek word “keration” which is also the Greek name for the Carob tree (Ceratonia Siliqua). In the Middle East, this tree is fairly common and produces pods with seeds. When dried, these seeds turn black and very hard. Ancient merchants discovered the seeds were always uniform in weight and used them for weighing pearls, diamonds and other precious stones. The carat weight was standardized in the 20th century. The United States officially adopted the metric carat in 1913. One carat = .02 grams or 200 milligrams.
Diamonds are sold by carat, (ct.) not to be confused with karat, (kt.), which in the United States refers to gold quality. The carat is a unit of weight, not size. This is an important concept since the specific gravity varies among different minerals. For example, Emerald has a lower specific gravity than diamond. A one-carat emerald is 20% larger than a one-carat diamond. Ruby has a higher specific gravity than diamond, which makes a one-carat ruby smaller than a one-carat diamond.
Everyone first asks what size is the diamond? Most times color, cut, and clarity seem of secondary importance. It is very important to realize that small shifts in quality and size can make tremendous differences in value. As the size of the diamond increases, the price increases significantly. Diamonds weighing two-carats will sell for far more per carat than one-carat diamonds. As you will see in the chart below, the price of a diamond tends to increase exponentially as the size increases.
Price movement by carat size for the highest quality diamond. Prices are New York 47th Street Wholesale Prices 12/27/02
* Pictures not actual size. For reference only.*
Having a basic understanding of the cost relationship to carat size, holding all other diamond qualities equal, will help determine the size diamond the budget will allow.