Gold fever, gold rush, Goldfinger… the world is obsessed with gold. People have literally killed over this precious metal commodity. The price of gold has soared up to 1,200 dollars USD per ounce in 2010 and it could go higher yet. Is gold worth investing into? What drives the price of gold?
What drives the price of gold? Truly it is supply and demand, but what is behind the demand? We do not eat gold or consume it in the traditional sense. Granted, gold is rare but as we accumulate gold are we not simply stockpiling it? What are the uses of gold?
With the few uses of gold compared to other commodities it might come as a surprise as to why demand is so high. The bigger answer is because it has become a standard that investors, banks, and governments use and people trust in. As long as people believe it has worth, regardless of the practicability, the prices will remain high.