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Why is gold such expensive?

  1. cherryseeds profile image59
    cherryseedsposted 4 years ago

    Why is gold such expensive?

    I have struggled to understand the price of gold as a substance. As a scientist with some knowledge in Chemistry I understand its solidity and quality as a material but yet I don't see how they may justify the price tags written on the golden items to me. could anybody explain to me why?

  2. profile image0
    JThomp42posted 4 years ago

    Gold is expensive because there is very little found in what is mined and extraction costs are high. Moreover, gold is running out.
    Another aspect to gold being expensive is you are looking at it from the perspective of what it is priced in. For U.S. citizens it is priced in dollars. As our government via the Federal Reserve prints more dollars, things become more expensive.
    Too look at it another way, if all the money in the world bought all the goods in the world, and then you doubled the amount of money, you haven't created any more wealth, you've just made goods twice as expensive.

    1. cherryseeds profile image59
      cherryseedsposted 4 years agoin reply to this

      Thanks JThomp42, it means then that dollars have a link with the price of gold? then there is point in it that I didn't have in mind, thank you very much. I only attributed it to being precious

    2. profile image0
      JThomp42posted 4 years agoin reply to this

      You are very welcome cherryseeda!

  3. profile image0
    iCrystalWriterposted 4 years ago

    And in addition to what JThomp42 said, gold really is not the only precious metal that is expensive, platinum is usually more expensive than gold.

    Any precious metal that is used as jewelry and in the industries generally tends to be expensive because of its scarcity, the demand for it and its perceived value and how much others are generally willing to pay for it.

    There is a real worth or market price for the precious metals like gold and platinum, which is usually listed on some sites on the internet or in the newspapers. However when these metals are used in jewelries for instance, some other costs (middlemen costs, jewelry stores cost of doing business etc) get added to them before they get to the end-user (through the jewelry stores etc) as a jewelry item or piece.

    Those other costs could be as high as 25%, 50% etc or more depending on the store where you may be buying your jewelry piece from. This is one of the main reasons why when you want to resell a jewelry piece that contain such metals and/or some valuable gemstones, you may only get back a fraction of what you actually paid for it, even if you only bought the item from the stores today.

    Jewelry pieces are generally valued, that is their real worth are based on the market/resale price of the precious metals (and/or valuable gemstones) in them and not on the retail price of the item in the stores.