Diamonds aren't rare compared to other gemstones such as Tanzanite and black opal. The perception of rarity is created by the diamond suppliers, who release just enough diamonds into the market to meet current demand.
Although diamonds are categorized as precious gems, they're actually the most common gems on earth. Diamonds are also common in outer space. These diamonds are created when meteorites collide with other bodies in space, creating heat and pressure that results in the formation of diamonds crystals.
Another common misconception is that diamonds are the world's most valuable gemstone. However, only diamonds that exhibit certain qualities are very valuable. Diamond values are determined by a grading system developed by the Gemological Institute of America. The grading system is based on four factors: clarity, color, cut and carat weight.