That's nice, but gold is grossly overvalued if you're just looking at the still-rather-limited set of industrial applications. Gold is valued so high for emotional and historic reasons. That will likely change as governments sell off their reserves.
I never said gold was a good investment; I was merely replying to an overstatement.
Indeed, go read Post #24 for my opinion of gold as an investment.
Not really. One of the reasons the price of gold is inching higher is that physical demand has been greater than production for the last several years. It has been acting more like a commodity than in the past when, as you mention, emotional reasons have influenced the price.
Many of the world's large producers, especially in South Africa, are running out of economically produced reserves. The huge open pit producers in northern Nevada are mature mines and grades and reserves are falling, (meaning operating costs per ounce are rising).
During the late 80´s and 90's, when the price was below $300/oz, nearly all mining companies drastically reduced spending on exploration. This had the effect of forcing many very experienced exploration geologists into other professions and there has been a drought of new discoveries, and new production. The current price bump largely reflects this production lag the industry is passing through.
People need to realize, there is a very long lead-time between exploration-discovery-production in the metals business. It's not like an oil well, where if the well is productive, you just connect the pipe and turn on the valve. From discovery to production can easily take as much as 3-years, (fast track), and normally from 5 to 10-years.
Over the next several years, as recent discoveries are brought into production and marginal deposits at low gold prices are now profitable, the price will stabilize. I suspect the price will hit $575 sometime next year then drop to the high $400's.
My two ounces worth.