Gold isn't being treated all that differently to the other period 6 or 11 elements. Although it does sometimes get randomly good tax treatment due to its history which keeps it entrenched as the first choice for a monetary metal. But fundamentally it is being sold at cost to mine + a margin, same as everything else. My memory is anything with similar properties to gold has a similar price. The bulk of its value comes from nobody being able to produce the stuff for much less than $50k/kg US.
If history was erased, the price of gold would go down a bit because demand drops, but it would still be somewhere similar to $50k/kg US - to a first approximation people can't produce gold more cheaply than that. The price might even go up if the cheap producers are big bulk-mining operations.
Just because something is expensive to produce doesn’t mean that it’s worth that much.
Well ... it kinda does? If a commodity cannot be produced for less than $X, then the price of that commodity is not going to be that far below $X. The price can vary away to anywhere you like to signal for producers to open and close in the short term, but the equilibrium price point is ~= cost of production and the market will trend in that direction.
I'm going off one article [0] but there is enough gold to make a 28m x 28m x 28m cube. That isn't a lot of gold when compared to the 8 billion humans in the world and the amount of metal we go through (of iron, aluminium, copper, etc). Unless something really novel happens in the mining space, the price is never going to be low enough that an ordinary person can have a big block of gold. It will stabilise on the cost to mine pretty quickly.
There are other metals that are just as good as gold (like platinum) that get less press but are similarly priced.
[0] https://www.usgs.gov/faqs/how-much-gold-has-been-found-world
This sparks an interesting thought (for me) - gold mining (and really, any mining) is intertwined in modern times; copper mining produces gold as a by-product for example. We derive palladium and platinum from refining for other metals, we get sand for concrete from gold mining, etc. Point being, the mining industry is interwoven as to what is extracted for refinement, the by-products of that refinement (and the environmental destruction :() which of course is all economically intertwined. A mine probably won't shut down, it would probably shift to another focus?
But Bitcoin is mined for one thing (itself) and produces environmental waste (heat, etc.) with no by-products (another coin?) and no other mining (Monero?) produces Bitcoin as a by-product. So it makes me think that while it sounds good on paper to compare Bitcoin to Gold, it really doesn't work like that in real life.
I don't think this says anything about why the gold price is what it is. If gold suddenly gained lots of value then it would still be cost + margin, because new mines would open up in places where gold mining had previously been unprofitable.
This price chart, especially since early 2019, seems to suggest otherwise:
> These metals, especially silver, have unusual properties that make them essential for industrial applications outside of their monetary or decorative value.
Sounds special to me. There are lots of things we would make out of gold and silver if they were more common. Gold has quite a bit of inherent value independent of cultural accidents regarding beauty.
> But copper—used in shell casings—was a high-priority commodity during the war. So Marshall and Nichols struck on the idea of using silver as a substitute. Congress had authorized the use of up to 86,000 tons of Treasury Department silver for defense purposes.
(...)
> Nichols met with Undersecretary of the Treasury Daniel Bell on August 3, 1942, to inquire about borrowing 6,000 tons of silver from Treasury vaults. In his memoirs, Nichols relates that Bell indignantly informed him that the Treasury’s unit of measure was the troy ounce—though not all present at that meeting recall any unpleasantness.
(...)
> Scrap recovery and cleanup operations were so successful that over the course of processing, more than 1.5 million pounds of silver were collected and returned to Treasury, much of it likely originating from earlier and unrelated silver processing. That more than offset a much smaller amount—11,000 pounds—of borrowed Treasury silver that was unaccounted for.
(...)
> The busbars were massive conductors about a foot square that carried current to the magnet coils. During their manufacture, armed guards again stood by, this time with pieces of paper positioned to catch drill dust as workmen bored holes in pieces of silver in preparation for fastening them together.
https://www.americanscientist.org/article/from-treasury-vaul...
Gold is less useful than most people think:
> In a 2012 paper entitled "The Golden Dilemma",[1] Claude Erb and Campbell Harvey examined some common assumptions about gold. First they looked at gold as an inflation hedge, analyzing gold returns from 1975 (the year the U.S. came off of the gold standard), through March 2012. They found that, due to its real-price volatility, gold had not been a good inflation hedge over the short- or long-term.
* https://www.pwlcapital.com/will-gold-save-the-day/
It's only of note because of historical accident and it's use in certain cultures (along with silver as well). The Incas had piles of gold, but only used it for jewelry and such, and not as a currency.
* https://www.tourinperu.com/blog/inca-gold-culture-invasion-r...
If we didn't have the culture references of the Gold Standard, I don't think most people would accept a shiny rock as anything special. Or at least gold (Au) specifically, and not any other Period 6 element:
* https://en.wikipedia.org/wiki/Period_6_element
Is there perhaps something special about Group 11 element (Cu, Ag, Au) that they should be treated as "currency"?
* https://en.wikipedia.org/wiki/Group_11_element
They are certainly useful from a tooling perspective in some ways, but beyond that?