Gold has some use, but the amount of gold we need for the uses you mention is much less than the supply of gold we currently have available.
Gold is hardly “the best metal”. We could argue over what metal is the best. Aluminum is certainly a highly useful metal, used for construction, for preserving food, for electronics, for insulation, for holding our beer and soft drinks, for baking, for cars and trucks, and many other uses.
Of course, Iron/Steel is probably the winner of the “necessary for modern life as we know it”.
Lead of course has a wide list of uses. Copper/brass/bronze are also highly useful in a multitude of places where gold would be useless.
Gold is too soft a metal to have much value in any form of construction. At least you can make bowls and silverware out of silver; a gold knife wouldn’t be nearly as good as a silver one, or a steel one.
Gold will always have some value, because it does have a range of uses especially in electronics. But 65% of gold that is used is used for jewelry. 25% is used in electronics, and 10% is used in other industrial applications, such as thin film applications for window tinting.
And yes, if used with other metals, it can be used for things like goblets and other applications where a harder metal is used.
But if you take into account the gold that is used solely as a medium of exchange, and the amount used for things like jewelry, you can see that, if people lost interest in gold today, we’d have enough gold for years of practical use, plus a current supply chain that currently overproduces by a factor of 2.
I don’t think Gold will ever become worthless, at least not in my lifetime. But my point is that the only thing propping up Gold prices is the expectation that Gold will remain valuable to people. The current valuation is a psychological value, not a physical value.
That barborous metal, gold.
Gold is solely a medium of exchange ? Really, dude. Do some homework. Google is your friend.
You’re right to some extent but every differnt metal (or other substance) is useful in different ways. You could never construct a building with gold since it’s not strong enough. But give somebody a bunch of steel or aluminum coins as payment and leave them in a room with a leaky roof. They’ll rust away. The ice cream taster at Ben & Jerry’s uses a spoon made of solid gold, because every other metal would affect the taste.
Gold, like anything else, has a natural price in relation to everything else, and perhaps it’s been inflated since every other item seems worthless in comparison. Things that last will always have value. I don’t think it’s psychological. Ever read The Power of Gold, by Peter Bernstein? Great book.
You are correct that gold has a premium over other PM's for non-commercial reasons. Where i disagree is that the reasons are psychological. They are experiential. Gold has proven over historical times to be a store of value.
The ratio is rapidly changing as more and more uses for gold are being found. It is the number one material of choice for electrical connections and new nano particle uses are on a tear...
Only yesterday I saw a new technique for using gold nano particles in human waste disposable. Who knows what future uses may be.
What is the non psychological value of the Federal Reserve Note other than starting a fire or toilet paper? Gold is relatively rare and not reproducible without limit. Could fire up a proton accelerator, I guess.