Doug is correct in his comments. And historically, golds' _specific_ use value as a commodity "like all others" was as a general equivalent of exchange value (money), due to its properties of relative scarcity, relative malleability (and therefore 'divisibility'), realtively low metallic melting point (a subproperty of its malleability), and, above all, its almost total resistence to corrosion and oxidation ('rust').
This last property is why gold is almost never found in nature in oxide form, and why it is initially more easily "extracted" (from river beds ,etc.), unlike its chemical sisters, silver and copper, which almost always have to be mined. Once the 'easy' gold is extracted, of course, it too must be mined the hard way. But for this reason, gold was, perhaps ironically, the first metal worked by human beings..
Otherwise, historically gold was also useful as a luxury item - jewelry or as corrosion-resistant plating by the wealthy. Nowadays, it is also used - sparingly, because of its cost - as a electrical conductor. Gold is no longer the standard for currency because cheaper substitutes for some of its once unique properties have been found: mainly, the malleably of public confidence in the intrinsic value of the state-issued banknote, derived from the state's capacity to extract tax revenues on a _regular_ basis.
Alas, this public confidence is still prone to periodic corrosion, should the states' capacity to extract sufficient tax revenues fall into question, as looks likely to be the case with Dubyas' extraordinary tax plunder giveaways (should they become law), coupled to equally extraordinary war expenditures projected out beyond any visible horizon. Shades of early 17th century Late Imperial Spain!
During such times - should this corrosion of confidence involve the global "reserve" banknote of choice - the banknoted price of gold will temporarily skyrocket, then fall back to the long term 'flat' trend as Doug indicated, when public confidence has been "reworked", hammered into place perhaps around another form of state banknote.
-Brad
Date: Wed, 26 Feb 2003 13:45:17 -0800 From: joanna bujes <joanna.bujes at sun.com> Subject: Gold
Since someone brought it up...I'm curious. What I see in the capitalist press are two contradictory positions:
1. Gold is commodity and like all commodities, its value will go down. 2. Gold is the species of last resort and given the uncertainty about the dollar, euro, and yen, it will go up.
????
Joanna