Abstract: The accurate grading of set diamond is difficult, because the colour, clarity and cut have been influenced by setting metal. This paper discusses the solution of this problem. By comparing the grading results of diamonds before setting with that of diamonds after setting, the author finds that, if we use a simple tool (a stand of colour masterstone), a new method of observation for clarity grading, we can get much more accurate result. The research states that, by using the new technique properly, the result of colour grading is almost the same accurate as that of diamonds unsetting, except extraordinary case the clarity grading of setting diamond is not influenced and the cut grading is only slightly influenced