A Gold Bubble?

[Sriad]

I've thought there's been a gold bubble swelling for a couple years now, though it isn't even a shadow of the real estate bubble China's got going.

Gold is a funny commodity in that it has very little intrinsic value. It only has a small scattering of uses that don't involve "look pretty" in some way--high cost-of-failure electronics, a transparent conductor, a reflector for EM radiation, and some chemical uses. That means that other than a basement value (maybe 10% its current cost) all of gold's worth is determined by people saying "gold is worth this much."

[aerius]

Gold is a funny commodity in that it has very little intrinsic value. It only has a small scattering of uses that don't involve "look pretty" in some way--high cost-of-failure electronics, a transparent conductor, a reflector for EM radiation, and some chemical uses.

It's not just high cost of failure electronics, it's nearly all electronics. There is not a single computer these days that doesn't have gold in it, if you have an SD card or USB flash drive it'll have gold plated contacts, digital cameras have them, cell phones have them, iPods & other music players have gold in them, there are very few pieces of modern electronics which don't have gold in them somewhere.

[Sriad]

Gold is a funny commodity in that it has very little intrinsic value. It only has a small scattering of uses that don't involve "look pretty" in some way--high cost-of-failure electronics, a transparent conductor, a reflector for EM radiation, and some chemical uses.

It's not just high cost of failure electronics, it's nearly all electronics. There is not a single computer these days that doesn't have gold in it, if you have an SD card or USB flash drive it'll have gold plated contacts, digital cameras have them, cell phones have them, iPods & other music players have gold in them, there are very few pieces of modern electronics which don't have gold in them somewhere.

That was worded poorly on my part... In most electronic items it's used SOMEWHERE, but in very tiny amounts. An average cell phone, for example, has about .02 grams of gold in it (if you trust electronic recycling company claims at least, cell phone adds proclaiming how many milligrams of gold is in their product are a bit thin on the ground). In other words the gold in one 18K wedding ring = about 250 cell phones.

It HAS real application value, but that's trivial compared to its perceived value. If you want a precious metal with high intrinsic value go with platinum instead.

[Dahak]

I must say that investing in gold mines was actually a very profitable move on my part, even though I still would like to have a Krügerrand or something at home. Mainly because it looks pretty