The historical reasons for Gold and Silver being used as a store of value (and as a currency) are:
1) Divisibility : it is easy to divide a large amount of the metals into smaller amounts (ingots->coins)
2) Durable : as noted, it doesn't corrode. You can bury it in the ground for a thousand years, and it comes up shiny and new
3) Rarity : There isn't that much around. All the gold mined since the beginning of history would fill an Olympic sized swimming pool.
The intrinsic value of gold as a store of value are from lack of competition. It's the best thing for the job, simply by being best at those three criteria. Add in cultural history and it's a lock.
Other things have higher usage as a store of value - prime agricultural land - but it's hard to sell 1/150th of an Acre to buy some bread. Other things as just as durable (rocks) but don't have rarity. Some rocks are durable and rare (opals, diamonds) but aren't easily divisible.
It's easy to get existential about Gold - 'it's just a shiny metal, WTF?' but countless societies have valued it highly as a store of value and as a trading currency, and that is not likely to go away anytime soon, because of a lack of alternatives. Societies and economies need stores of values, and Gold continues to fit the bill.
The fact that Gold is worth $1200/oz says more about the $ than it does about the oz. It's the $ market price that you're commenting on.
I was not commenting on its value history. I was trying to convey that this value is almost entirely subjective, which goes against what one would think "intrinsic value" means. "Expected value" might be better, but that would weaken the argument against Bitcoin.
1) Divisibility : it is easy to divide a large amount of the metals into smaller amounts (ingots->coins) 2) Durable : as noted, it doesn't corrode. You can bury it in the ground for a thousand years, and it comes up shiny and new 3) Rarity : There isn't that much around. All the gold mined since the beginning of history would fill an Olympic sized swimming pool.
The intrinsic value of gold as a store of value are from lack of competition. It's the best thing for the job, simply by being best at those three criteria. Add in cultural history and it's a lock.
Other things have higher usage as a store of value - prime agricultural land - but it's hard to sell 1/150th of an Acre to buy some bread. Other things as just as durable (rocks) but don't have rarity. Some rocks are durable and rare (opals, diamonds) but aren't easily divisible.
It's easy to get existential about Gold - 'it's just a shiny metal, WTF?' but countless societies have valued it highly as a store of value and as a trading currency, and that is not likely to go away anytime soon, because of a lack of alternatives. Societies and economies need stores of values, and Gold continues to fit the bill.
The fact that Gold is worth $1200/oz says more about the $ than it does about the oz. It's the $ market price that you're commenting on.