You misunderstand me. I know he is talking about jewelry. My point is that people are buying gold jewelry mostly because it is expensive. Yes gold has certain p

You misunderstand me. I know he is talking about jewelry. My point is that people are buying gold jewelry mostly because it is expensive. Yes gold has certain properties, but there are other precious metals with similar properties (platinum, etc). So given the choice between similar metals with similar properties, people will tend to use the most expensive one for jewelry. In other words, Krugman's argument is circular (gold has value because it has value).