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> That’s what intrinsic value means, people value it for what it actually is. People value gold for it's scarcity. If there was limitless supply of gold, no-o
by h0l0cube 7y ago
> That’s what intrinsic value means, people value it for what it actually is.
People value gold for it's scarcity. If there was limitless supply of gold, no-one would be interested in buying it for a high price. It's the same for diamonds, and why De Beers sought to control the supply of mines and synthetic means of production, which creates an artificial 'scarcity'. This is also why cubic zirconia is not prized for jewelry, despite it's similar aesthetic qualities to diamonds.
- javert 7y agoScarcity alone is not enough to make something valuable. The value of gold comes from the fact that is has been a financial hedge (safe haven, at least to some degree) for a very long time, and presumably will continue to be for a very long time. I'm not sure if that is a correct use of "financial hedge" but it seems to get the point across. Gold is not necessarily a good store of value, but its downside is certainly much more limited than a lot of other things.