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Why is gold so valuable?

Why is gold so valuable?
The world of global finance is abuzz these days with dizzying attempts to determine whether the already historically high price of gold is poised for an uptrend or a downtrend. In the immediate aftermath of Standard & Poor’s downgrade of the U.S. credit rating from level AAA to AA+, gold prices soared to even higher record levels on August 9 to reach $1780.

This more than 40% increase in the price of gold over a 12-month period is attributed to investors’ desire to seek a safe haven amid uncertainties in foreign exchange markets in the context of national debt crises in Europe and the United States and concerns about inflation. Yet tracing patterns of levels of gold as a store of value relative to a range of stock indexes, money supply trends, commodity prices, inflation or deflation, monetary policy, political instability, consumer behavior, and other indicators can produce varied interpretations from a likewise wide range of viewpoints. Underlying all scientific attempts to pinpoint the direction in which gold prices are heading is the most important, and most elusive, question as to precisely why gold is valuable. This question becomes even more difficult to answer in a present-day geopolitical and global financial environment that is profoundly transformational on complex levels, a circumstance that leaves scholars, commentators, and policymakers a bit stumped in their attempts at identifying contemporary understandings of value as rooted in sociocultural or economic structures. Read more here.

#culture #economy #gold

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