There are no universally accepted grading systems for any gemstone other than white (colorless) diamond. Diamonds are graded using a system developed by the Gemological Institute of America (GIA) in the early 1950s. Historically all gemstones were graded using the naked eye. The GIA system included a major innovation, the introduction of 10x magnification as the standard for grading clarity. Other gemstones are still graded using the naked eye (assuming 20/20 vision).
A mnemonic device, the "four C's" (color, cut, clarity and carat), has been introduced to help the consumer understand the factors used to grade a diamond. With modification these categories can be useful in understanding the grading of all gemstones. The four criteria carry different weight depending upon whether they are applied to colored gemstones or to colorless diamond. In diamonds, cut is the primary determinant of value followed by clarity and color. Diamonds are meant to sparkle, to break down light into its constituent rainbow colors (dispersion) chop it up into bright little pieces (scintillation) and deliver it to the eye (brilliance). In its rough crystalline form, a diamond will do none of these things, it requires proper fashioning and this is called "cut". In gemstones that have color, including colored diamonds, it is the purity and beauty of that color that is the primary determinant of quality.
Physical characteristics that make a colored stone valuable are color, clarity to a lesser extent (emeralds will always have a number of inclusions), cut, unusual optical phenomena within the stone such as color zoning, and asteria (star effects). The Greeks for example greatly valued asteria in gemstones, which were regarded as a powerful love charm, and Helen of Troy was known to have worn star-corundum.
Historically gemstones were classified into precious stones and semi-precious stones. Because such a definition can change over time and vary with culture, it has always been a difficult matter to determine what constitutes precious stones.
Aside from the diamond, the ruby, sapphire, emerald, pearl (strictly speaking not a gemstone) and opal have also been considered to be precious. Up to the discoveries of bulk amethyst in Brazil in the 19th century, amethyst was considered a precious stone as well, going back to ancient Greece. Even in the last century certain stones such as aquamarine, peridot and cat's eye have been popular and hence been regarded as precious.
Nowadays such a distinction is no longer made by the trade. Many gemstones are used in even the most expensive jewelry, depending on the brand name of the designer, fashion trends, market supply, treatments etc. Nevertheless, diamonds, rubies, sapphires and emeralds still have a reputation that exceeds those of other gemstones.
Rare or unusual gemstones, generally meant to include those gemstones which occur so infrequently in gem quality that they are scarcely known except to connoisseurs, include andalusite, axinite, cassiterite, clinohumite and red beryl.
Gem prices can fluctuate heavily (such as those of tanzanite over the years) or can be quite stable (such as those of diamonds). In general per carat prices of larger stones are higher than those of smaller stones, but popularity of certain sizes of stone can affect prices. Typically prices can range from 1USD/carat for a normal amethyst to 20,000-50,000USD for a collector's three carat pigeon-blood almost "perfect" ruby.
Enamelled gold, amethyst and pearl pendant, about 1880, Pasquale Novissimo (1844–1914), V&A Museum number M.36-1928.
In the last two decades there has been a proliferation of certification for gemstones. There are a number of laboratories which grade and provide reports on diamonds. As there is no universally accepted grading system for colored gemstones, only one laboratory, AGL (see below) grades gemstones for quality using a proprietary system developed by the lab.
International Gemological Institute (IGI), independent laboratory for grading and evaluation of diamonds, jewellery and colored stones.
Gemological Institute of America (GIA), the main provider of education services and diamond grading reports
American Gemological Society (AGS) is not as widely recognized nor as old as the GIA.
American Gem Trade Laboratory which is part of the American Gem Trade Association (AGTA) a trade organization of jewelers and dealers of colored stones.
American Gemological Laboratories (AGL) which has been taken over by "Collector's Universe" a NASDAQ listed company which specializes in certification of collectables such as coins and stamps
European Gemological Laboratory (EGL) founded in 1974 by Guy Margel in Belgium.
Gemmological Association of All Japan (GAAJ-ZENHOKYO), Zenhokyo, Japan, active in gemological research
Gemmological Institute of Thailand (GIT) is closely related to Chulalongkorn University
Gemmology Institute of Southern Africa, Africa's premium gem laboratory.
Asian Institute of Gemmological Sciences (AIGS), the oldest gemological institute in South East Asia, involved in gemological education and gem testing
Swiss Gemmological Institute (SSEF), founded by Prof. Henry Hänni, focusing on colored gemstones and the identification of natural pearls
Gübelin Gem Lab, the traditional Swiss lab founded by the famous Dr. Eduard Gübelin. Their reports are widely considered as the ultimate judgement on high-end pearls, colored gemstones and diamonds
Each laboratory has its own methodology to evaluate gemstones. Consequently a stone can be called "pink" by one lab while another lab calls it "Padparadscha". One lab can conclude a stone is untreated, while another lab concludes that it is heat treated. To minimise such differences, seven of the most respected labs, i.e. AGTA-GTL (New York), CISGEM (Milano), GAAJ-ZENHOKYO (Tokyo), GIA (Carlsbad), GIT (Bangkok), Gübelin (Lucerne) and SSEF (Basel), have established the Laboratory Manual Harmonisation Committee (LMHC), aiming at the standardization of wording on reports and certain analytical methods and interpretation of results. Country of origin has sometimes been difficult to find agreement on due to the constant discovery of new locations. Moreover determining a "country of origin" is much more difficult than determining other aspects of a gem (such as cut, clarity etc.).
Gem dealers are aware of the differences between gem laboratories and will make use of the discrepancies to obtain the best possible certificate.
A few gemstones are used as gems in the crystal or other form in which they are found. Most however, are cut and polished for usage as jewelry. The picture to the left is of a rural, commercial cutting operation in Thailand. This small factory cuts thousands of carats of sapphire annually. The two main classifications are stones cut as smooth, dome shaped stones called cabochons, and stones which are cut with a faceting machine by polishing small flat windows called facets at regular intervals at exact angles.
Stones which are opaque such as opal, turquoise, variscite, etc. are commonly cut as cabochons. These gems are designed to show the stone's color or surface properties as in opal and star sapphires. Grinding wheels and polishing agents are used to grind, shape and polish the smooth dome shape of the stones.
Gems which are transparent are normally faceted; a method which shows the optical properties of the stone’s interior to its best advantage by maximizing reflected light which is perceived by the viewer as sparkle. There are many commonly used shapes for faceted stones. The facets must be cut at the proper angles, which vary depending on the optical properties of the gem. If the angles are too steep or too shallow, the light will pass through and not be reflected back toward the viewer. The faceting machine is used to hold the stone onto a flat lap for cutting and polishing the flat facets. Rarely, some cutters use special curved laps to cut and polish curved facets.