Diamonds come in virtually all colors of the rainbow, from the "beautiful violet" of the Hope diamond to shades of blue, brown, gray, orange, etc. But colored diamonds are very rare and precious. Chances are, all the diamonds you'll see in your diamond shopping will be white or yellow, and the whiter the better.

 The yellow color in diamonds comes from nitrogen, and as a rule, the more yellow the stone, the less value it has. There's a good reason for this. The yellowier the stone, the less sharp and sparkly it appears. A whiter stone lets lighter pass through it, making it sparkle and shine.

 The exception to the rule is the canary diamond, which is a beautiful bright yellow and very expensive. Some people are more sensitive to the color of diamonds. What may appear slightly yellow to you may look clear to another person, so it will take a higher color grade to satisfy you.

 The best way to judge the color of a diamond is to use either a Gran Fall Spectrum Colorimeter by Gem Instruments or compare it to a master set. 

HERE'S THE COLOR GRADING SCALE: 

D, E, F refers to colorless and G, H, I refers nearly to colorless, J, K, L indicated slightly yellow, M, N, O shows light yellow P, Q, R, S, T, U, V, W, X shows darker yellow and Z to Fancy colors.

Even though there are several grades in each category, there are slight differences between the letter grades. D is the clearest and most valuable, X is a dingy yellow and least expensive. Z grade-colored diamonds are the rarest and most expensive. A diamond so saturated with nitrogen that it becomes a deep, rich yellow is as rare as a colorless diamond.

 FLUORESCENCE

Fluorescence is a diamond's reaction to ultraviolet (UV) light. Some diamonds glow in different colors under UV light, and the general rule is to avoid them. If you put a diamond under UV light and it glows strong blue, the diamond may look dull in the sunlight. Diamonds with strong fluorescence may be worth up to 20% less than diamonds which do not fluoresce. Faint fluorescence which doesn't fog the diamond is OK. 

CORRESPONDING GRADING

Corresponding grading means matching clarity grades with color grades. For every clarity grade, there's a color grade that corresponds, or makes the best match in determining value. Diamonds that have corresponding grading sell for higher prices originally and they also appreciate in value more than diamonds that don't, and therefore have higher resale value. Buying a diamond with non-corresponding clarity and color grades is like buying a pink Porsche: it's okay as long as you don't try to resell it. The market for pink Porsches just isn't as good as the market for, say, red Porsches. 

The value of a stone is always based on the lowest clarity or color grade and its highest corresponding grade. When you don't correspond the grades — say you buy high clarity and low color, or high color and low clarity — you'll never get your money back for the higher grade. http://www.diamondstudsofamerica.com