Gold has always been considered a “safe harbor” with some investors flocking to the shiny metal when there is turbulence in the markets. But what is the intrinsic value of gold? Very little. Much of the percieved value is speculative. Gold is not copper which has various applications such as in copper wire, with the pricing strengthening with an uptick in the economy due to increase in new house building etc. While gold has some industrial applications, the pricing is mostly emotion driven and has been successively down the past 1 (down 28%), 3 and 10 year periods. And there seems to be no compelling factor indicating that the future is going to be very different!
Inflation adjusted price of gold over time – it hit a high in of $2000 in 1980 and fell to a low of $400 at the end of the previous century, and now stands at $1230 per oz.