GOld ownership is a choice. So obviously those who don’t think gold is a good investment won’t own it.
The question is, who is using better logic, those who decide not to buy gold, or those who decide to buy gold?
Those who own gold need gold to go up in value to make money. So of course they will tell others how great gold is.
What is interesting is how many companies there are that spend millions of dollars convincing other people to buy their gold.
If gold is such a great investment, why are these people spending so much money to get other people to buy it from them?
The trouble with gold is that it is all perception. Gold has no intrinsic value, and if one day people figure that out, it will be worthless. Sure, people may never figure it out.
Meanwhile, when a person arguing that gold is a great investment argues in support of that position that we have only mined 10% of the gold available in a mine, you have to wonder — if there is enough gold still available to increase the supply by 10 times, doesn’t that suggest there will be a supply glut which will destroy demand?
Gold has run up greatly this decade. Of course, the $250 value was a depressed value from higher earlier values. And of course, there has been a lot of work done to convince people that gold is running out, and the better buy it before it is gone.
Nobody knows where gold is going next. It could go up, it could go down. But the point is, whatever it does, will be because of factors that have nothing to do with gold itself (it’s supply, the chance of finding more, current mining levels, current uses, etc.). That’s why it’s not really an “investment”, it’s a hedge against other things.
Technically, nothing has any "intrinsic" value. The value of any commodity is exactly that price at which the extrinsic consumer values it, nothing intrinsic and nothing less or more.
That being said, though -- like any commodity, gold has certain intrinsic qualities, and many of these are particularly monetary qualities:
There are five of these characteristics: recognizability, divisibility, portability, high value in relation to weight and volume, and continuity of value over time. Any physical commodity that possesses these five characteristics is a candidate to become the monetary commodity of a particular social order.
Historically, gold and silver have possessed these five characteristics to a greater degree than any other commodity." -- Gary North
Given that gold has particular qualities which make it an attractive candidate for usage as money, do you not think it sensible that consumers assign a money-value to gold reflecting this usefulness?
Those who own gold need gold to go up in value to make money. So of course they will tell others how great gold is.
What’s the deal?