Diamond Color
Cut | Color | Clarity | Carat Weight
The closer a diamond is to being colorless, the greater it's value. When the current grading system was introduced in the 1930's, diamonds were commonly called grade A, B, or C. So the current system began color grading with the letter D, to avoid any confusion.
Colors D, E and F are the highest grades. They are described as "colorless."
Colors G, H, I and J come next. They are described as "near colorless" or "white."
The colors from K to Z are tinted, (usually yellow or yellowish brown.) Those that are just lightly tinted, K, L and M are often said to "set white." That means that they are so lightly tinted that they will appear white if set in yellow gold. You would however notice their color if set in white gold or platinum.
As one gets further down the alphabet, the tinting gets stronger and the value lower. That is, until you get to the extreme. As the color becomes richer, you have a fancy colored diamond, rather than an off colored one. Then the value starts going up again.
Color grading is done by placing a diamond next to a set of previously graded gems. The color is compared to the graded gems to see which it comes closest to matching.
While this low tech approach is accurate, it is also expensive and time consuming. A compromise is often made on smaller gems, by grading batches within a range, rather than coming up with a specific grade. You will usually find diamonds under a carat graded as GH, or IJ, meaning that they are in that range.
This information is meaningful and saves you quite a bit of money. It costs over $100 to accurately grade a diamond. If you have a large diamond, where subtle differences in quality grades make a significant difference in price, then it is worth while. However, that isn't cost effective for the majority of gems.