On the gem side, the vast majority of people wearing diamonds would tell you they have utility.
On the industrial side, diamond is a fascinating material with physical properties at the extremes, e.g. hardness, thermal conductivity, electrical conductivity, etc etc. It is vital in many applications where there is simply no other material which could fulfil the physical requirements.
>>people wearing diamonds would tell you they have utility
Fashions change, yet people believe that diamonds have permanent value ('is forever'). In contrast to bullion, this is relatively recent development with little ties to traditional banking practices.
>>On the industrial side, diamond is a fascinating material
These can be made on demand, and cutting diamonds cost something like $1 per carat. Nobody is raging against the crystal lattice.
> Fashions change, yet people believe that diamonds have permanent value ('is forever'). In contrast to bullion, this is relatively recent development with little ties to traditional banking practices
No, actually diamonds (and other gems) have had artistic/cultural/symbolic value for as long as civilizations have existed. I.e. the "crown jewels", the "hope diamond" and more: http://en.wikipedia.org/wiki/List_of_diamonds
They simply do wonders with light and are aesthetically pleasing when well cut. Not to mention they are incredibly hard to destroy.
A completely arbitrary value that only requires a critical mass of women to being valuing some other arbitrary gauge of status as a surrogate. Consider how in the last few years owning Apple products has become its own perverse symbol of status, because Apple played an extremely effective rebranding campaign.
It's not arbitrary, though. Like all values, they are derived from an exchange. And to be fair, Apple's popularity is not only as a status symbol. For many people they provide a well-priced combination of features, sometimes extremely well-priced. A MacBook Air by any other company costs at least 50% more. If anything, your comment illustrates that Apple is saddled by their old reputation as having overpriced offerings, despite shifts of focus in their marketing campaigns.
Nonsense! With no utility, De Beers' monopoly is the only reason why these objects have value.