The most important thing to know about diamond colour is, in general, the less colour a diamond has, the more valuable it is, all other factors being equal. Diamonds are found in nature in a wide range of colours, from completely colourless (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 colour grading system uses the letters of the alphabet from D through Z, with 'D' being the most colourless and therefore the rarest and most valuable, and 'Z' having the most colour within the normal range, and being the least valuable, all other factors being equal. A diamond's colour is determined by looking at it under controlled lighting and comparing them to the grading laboratory colour scale, which is based on a set of diamonds of known colour. Here is a diagram showing how a diamond's colour is graded :

Diamonds with a colour grade of D, E or F are considered colourless; G, H, I and J are near colourless; 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 colourless, 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 colour grade that has a superior cut and clarity.

A diamond's colour 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 colour in a diamond if it is still mounted in a setting. For this reason, gemological laboratories will only grade diamonds that are unmounted.

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