As a simple level, my question is why gold is valuable - has always been valuable, universally. Of course, the answer is simple supply and demand. People want it, it is semi-rare. But why have civilizations across the world been obsessed with hording gold? Spices, salt, oils, coal, I can understand. These have practical uses. But gold is used only for trinkets and artwork - decoration and lavishment. Is the need for humans to display their wealth and power that strong and universal? There are times in history where controlling bronze (or copper and tin) was more important. Now, we have oil and the high metals. Yet until very recently, everything was pegged to gold and silver. How has all wealth been pegged to these minerals for so long?
I suppose the modern example can be diamonds. While always rare and valued, it was not until the modern era, thanks largely to aggressive marketing, that diamonds were considered so valuable and important. They have little practical use (though used industrially in saws and the like, these are smaller diamonds, and increasingly manmade). But they have become so incredibly valuable that entire nations have collapsed under the diamond industry. Were it not for artificial controls by companies like DeBeers, diamonds would lose their rarity, but still, we as a society seem to be under a spell. We could all decide, “the diamonds are worthless rocks, and the companies that sell them are international monopolies responsible for decades of civil wars and slaughters and hundreds of thousands of deaths” - yet we don’t.
What is it about mankind that is so dominated by shiny objects? Logically, wealth should be in what is most useful, most vital for survival (to a degree, this is true with oil today, and there has been talk about pegging money to oil). But why the domination of simple minerals? It would seem to me that, as far as history is concerned, mountains of gold are worthless compared to controlling the food supply, or rubber, or oil, or (historically) salt, or iron, or coal. So why the fascination?
If I were an ancient merchant or ruler, and some fool came to me offering rocks in exchange for food, I would have him thrown into the nearest lake! Is that unreasonable? Even without currencies, how did rocks become the measure of value? Is it similar to how a rare baseball card is worth so much?
It seems the price of gold is mostly bouncing around between 300$US and 400$US; I wonder if we’ll see a more linear progression on the long term?