Investors hold a significant ratio of all precious metal markets. This includes 30% of the gold market, 19% of the silver market, 17% of the platinum market, and 15% of the palladium market. In contrast, the diamond market is only perhaps 1% allocated to investors. Without knowledge of issues with standardization, it is almost mind-boggling that one of the most well-known and highly valued precious resources is barely touched by investors (see page 20, Precious Properties - Physical Attributes). In the absence of standardization, the path to liquidity becomes incredibly vague as each gem has its own characteristics and price tag.

Diamond liquidity was an issue because no organized exchanges or market makers existed.

Diamond price discovery and transparency were nonexistent because most diamonds were transacted privately, with subjective valuations. Former cartel control founded the supply chain on retail markup and price secrecy. Even today, most vendor prices are based on full retail prices then discounted for wholesale trade. Subjectivity in diamond prices subsequently results in discounts of 15-45%.

Most investors do not want to go through the hassle of buying and selling opaque and illiquid physical assets. The only other options these investors have is to invest in diamond producers, which are a layer removed from the asset itself. In a way, this generates a negative feedback loop as the less investors invest in diamonds, the less of a market there is for it, the less liquidity there is, and the less appealing the market is to prospective investors. Thus, despite being one of the most sought after and highly valued luxury resources, investors hold only around $12 billion of the $1.2 trillion market.