Understanding Color
The most important thing to know about diamond color is, in general, the less color a diamond has, the more valuable it is, all other factors being equal. Diamonds are found in nature in a wide range of colors, from completely colorless (the most desirable trait) to slightly yellow, to brown. So-called ‘fancy color diamonds’ come in more intense colors, like yellow and blue, but these are not graded on the same scale.

The diamond color grading system uses the letters of the alphabet from D through Z, with ‘D’ being the most colorless and therefore the rarest and most valuable, and ‘Z’ having the most color within the normal range, and being the least valuable, all other factors being equal. A diamond’s color is determined by looking at it under controlled lighting and comparing them to the Gemological Institute of America’s color scale, which is based on a set of diamonds of known color. Here is a diagram showing how a diamond’s color is graded:

Diamonds found in nature come in colors ranging from colorless to slightly yellow or brown, to more rare and costly pink, green or blue stones (commonly referred to as 'fancy' diamonds). Excluding 'fancy' diamonds, the ideal color for a diamond is colorless, although this is extremely rare.

A diamond's color is most accurately determined when it is not mounted in a setting, since settings can introduce tints of their own color into the diamond. This is more evident in yellow gold settings, and less so in white gold and platinum settings. Even a trained professional can't always tell the difference between close grades of color in a diamond if it is still mounted in a setting. For this reason, gemological laboratories such as the Gemological Institute of America (GIA) and American Gemological Society (AGS) will only grade diamonds that are unmounted.

Diamonds with a color grade of D, E or F are considered colorless; G, H, I and J are near colorless; K, L and M have a faint yellow tint; N, O, P, Q and R have a very light yellow tint and S, T, U, V, W, X, Y and Z are light yellow. A diamond that is a D color is absolutely colorless, and is therefore the most valuable. However, it's important to understand that color alone does not determine the value of a diamond. All '4Cs' must be taken into account. A diamond of D color that has imperfections or is poorly cut is not as valuable as a stone of a lower color grade that has a superior cut and clarity.

The bottom line
A diamond's color also has a great impact on its cost. Since ''colorlessness'' is the most sought-after trait in terms of color, diamonds that are higher up on the color scale (e.g. D, E, F) will have a greater value. If a diamond with a specific cut, clarity and carat weight is moved to the next color grade, it's possible to see a significant increase or decrease in the per-carat price--all other factors being equal. The idea is to choose a diamond that is as high on the color scale as your budget will allow, taking all 4Cs into account.