[kalleboo]

The industrial value of gold is far below its trade value.

And the value in jewelry is largely due to its perceived cost - otherwise any number of alloys that look the same would have just as astronomical cost. Just look at diamonds where nearly the whole retail value is based on de Beers marketing and industrial diamonds are in a different class.

[Ologn]

> The industrial value of gold is far below its trade value

Huh? Don't supply and demand meet at price? Isn't that mainstream economic theory?

If the price of gold went over its industrial value, or electrical coating value, or value as a tooth filling - then, as mainstream economic theory goes, demand falls as the price rises. The fact that wire manufacturers, dentists, industry etc. buy gold shows that it is trading at its proper value - when they want to use it.

Yes, the price of gold or any commodity can go above its real value for a short period of time, even for a few years. Eventually it always goes back to its utility price though.

> de Beers

I don't disagree that monopolies can fix prices for years, even decades. We can throw in Verizon/AT&T prices for mobile or land lines. Electrical companies. And so on. Yes, monopolies do throw off prices and values.

[bildung]

> > The industrial value of gold is far below its trade value

> Huh? Don't supply and demand meet at price? Isn't that mainstream economic theory?

Supply and demand have nothing to do with inherent value. You said it yourself: supply and demand meet at a price. I can personally value gold at $0, yet can resonably expect to sell it at a higher price tomorrow than I could buy it today.

Have a look at palladium. That metal has even higher industrial value than gold, and is rarer. Yet the market price per ounce is drastically lower than that of gold.