Diamonds are graded by color by using a set of master stones. A set of master stones or master set can consist of real diamonds or even cubic zirconia (CZ). Very frequently diamond graders use a cubic zirconia set of master stones simply because they are much cheaper or because of safety purpose.

The diamond grader will simply compare the color of the stone he or she is grading to the color of one of the stones from the master set. This is how they decide the color grade of a loose diamond.

The best or highest possible color grade is D. There is no such thing as A nor B nor C. The scale starts at D. Some people say this is because the word diamond also starts with a D.

The color grade D up to H are considered white so they are good colors. Whenever you purchase a diamond try to stay within the D to H range. If a specific stone is a D or E color but not withing your budget you might want to ask the jeweler to find you a similar stone but with an G or H color. The difference in price is rather substantial.

But colors of diamonds can vary, and some colors are more sought after and more valuable than others. Colors of diamonds can be green, yellow, blue, white, or pink. There are also the extremely rare red and purple diamonds. Of the colors of diamonds, some of the most valuable and rarest are the pink diamonds of the Argyle mine. The Argyle mine produces ninety-five percent of the world’s supply of pink diamonds, but they are very rare even there. Less than one tenth of one percent of the Argyle mine's diamonds are pink. In 1989, the world famous Christie's auction in New York City sold an Argyle mine pink diamond for over one and one half million dollars, which was 3.14 carat. Privately the Argyle mine has sold pink diamonds for one million a carat. Before the pink diamond came along the white diamond was considered to be the most beautiful in the world.

Colors of diamonds do also include pink diamonds of a lighter shade that come from India, Brazil and some African counties. These colors of diamonds are not in as great a demand, however, as the Argyle mine diamonds.

Green diamonds tend to have only a surface color and often the green tint is lost during polishing. They are still highly prized though. Colors of diamonds can vary from very light in color to very dark. Consider for instance the yellow diamond. It can be light as a light blonde in color, or a more forceful yellow like the color of a canary. The same is true of blue diamonds. In variety, they start at one end of the spectrum as a light blue, like a robin's egg, range to sky blue, and finally the darker steel blue that reminds one of blue steel gun barrels.

Champagne colors of diamonds are also popular and a variety of color shades is available. Very light in color champagne diamonds is much the color of star. Darker champagne diamonds will more resemble the color of brandy. Argyle rates champagne diamonds on a scale from C1 to C7 with the darker brandy or cognac color being rated at C7. There are also pink champagne diamonds available in colors of diamonds. Pink champagne diamonds can be light, medium, or dark, and can have secondary colors that add to the value.

Colors of diamonds were thought to be limited to those already listed until just a few short years ago when the purple diamond was discovered. Purple and crimson in color and weighing between two and five carats, the purple diamonds are considered to be priceless because it is the only one of its kind. The purple diamond in value beats out the red diamond, the next most rare. There are only ten red diamonds known of in the world.

When judging diamonds of gem quality the four C's are used. The four C's are color, cut, clarity and carat weight. This applies to colored diamonds just as to clear diamonds, but the intensity of the color can add to the value.

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