Gold: A legacy of our barbarian past?

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Gold prices are now well over $1,200/oz, and investors are fleeing to gold (along with the U.S. dollar) as other currencies and most other commodities are in decline. Gold prices fell today in dollar terms, but I wouldn't be surprised if it were at a nominal high if priced in euros or pounds.

Gold is a great hedge against uncertainty, yet I struggle to understand why. Sure, gold is a precious metal, but has few commercial uses other than for trading. It's certainly not as commercially used as, say, copper or iron. I understand the appeal to investors, but think that our humanity-wide attraction to gold is a bit silly. At least the dollar is the currency for a relatively robust economy, so I understand its attraction as a hedge. But gold? Why gold? For that matter, why not another rare and useless metal, like francium or seaborgium? Ok, so those metals may have significant uses (I have no idea), but you get the point.

gold isn't useless, it's a better shield against radiation than lead
they use it to line the spacesuits of astronauts

Jewelry is essentially useless, yet humans value it for no rational reason and gold is the most incorruptible metal for jewelry (and statues) because it retains its attractive glow virtually forever without tarnish or rust. Since the amount of available gold is relatively finite, it retains a much more stable value than paper money whose worth is essentially imaginary.

The worth of gold is equally imaginary. It has very few concrete uses (as a metal, rather than as an exchange good). You can't eat it, it won't keep you warm and it has a few artistic and technical uses. Its value as a trade good is determined purely by the players in the market, not by any inherent characteristic of the metal itself. It is a good trade good because it is scarce, it is durable, and it is divisible.

ruveyn

Money is a loaded subject. harhar

It got very good use in electronics and informatic,like silver and platinum,tough it is only used in small quantities.Apart from that,I don't know any other use,except that's it shiny...

That's all goods, really, that they have no value other than what the buyer pays for them.

Don't buy gold certificates though. They are the biggest ponzi scheme ever.

Barbarian "Past?"

Iraq's oil, Afganistan's minerals, we pillage and loot through blood and fire, just like always.

The main value of gold is governments can not print it. In the last decade the dollar has become a quarter, gold held it's value.

All governments have fallen, all paper money has become worthless, but this time it will be different?

It's called Rhodium price is US$80,000/kg

Said the fella on my £20 paper note

Who is that? Adam Smith? Is that an English pound of which you speak? I am sorry not to know more about English currency.

ruveyn

That's what I said, its availability is relatively finite - 'scarce' - therefore, its value is more stable. Paper money can be printed until the banks burst, at which time its worthless. Actually, US currency is already worthless because there is nothing finite of stable value to back it up. Nothing but more paper, of more imaginary value (based on seemingly limitless IOUs), and behind that, only ones and zeros in a computer network. Pay no attention to the Fed behind the curtain...

The only thing that backs gold up is people's willingness to accept it in exchange for other goods. Gold has no inherent value as an exchange good. Its value is purely conventional.

ruveyn

While nothing really backs up the dollar, paper currency has two advantages gold does not. First, paper money is a near universal method of exchange, whereas gold (or at least physical gold) has limitations. Secondly, paper money is far more fungible, whereas gold is not.

Gold is a load of crap, speaking as a machinist I'd rather be wearing aluminum or 4130 steel.