Explain the difference between diamonds and gold.

First of all, gold is a precious metal and diamonds are a precious mineral.  Gold is opaque while diamonds are semi-transparent.

Gold has an homogeneous quality while diamonds do not. Economically speaking gold is a commodity and is fungible and can be divided while diamonds are unique, no two diamonds are alike.

Valuation of diamonds is more complex than gold. Gold have very clear and concrete pricing structure while diamonds pricing is subjective.