huhhhhh wrote:
OP - like other posters have said, you should know that gold is actually a very useful, quality substance. Don't think that it doesn't have any practical value.
Very true. However, if gold's value was based on its practicality alone it would be worth much less. The value of gold is high because worldwide, for thousands of years, people have desired it for more than its practicality. Because of its beauty and durability it was one of the earliest forms of currency. Once that happened its worth was no longer dependent on what you could do with it, but what you could trade it for. While it's no longer used for currency it is seen as a "safe haven" asset (rightly or wrongly). Thus in times of economic turmoil, like we have now, the demand for gold goes up causing higher prices. Once the world economy stabilizes, the demand will fall and the price will collapse.