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Whats the use of having a lot of gold, when no one buys it?

Is it just to have a stable currency in the case when the value of money drops (inflation)?

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    I’m not sure what you mean by “when no one buys it”. Can you explain further what you are asking about? – Ben Miller May 10 '18 at 19:33
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    I have removed the last question in your post, which is not considered on-topic on this site. – Ben Miller May 10 '18 at 19:39
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    If you have it, presumably you bought it. So why do you assume no one would buy it from you? As long as you offer it at or slightly below market rates when you're ready to sell, you should easily find a buyer (who is, not surprisingly, going through the same thought process you did however many days/weeks/months ago when you were the buyer in this same scenario). – CactusCake May 10 '18 at 19:44
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    I don't understand the question; lots of people buy gold. In fact, on every single day when gold was sold, there was a buyer willing to buy gold; if there had not been, then there would have been no sale. On which days in history do you believe that there was no gold sold? – Eric Lippert May 10 '18 at 19:56
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    Ah ok. But that is a far-fetched situation - in record keeping history the price has never dropped to $0, so there has always been a willing buyer even during the worst recessions. Buyers might offer an unfair price, but that's not the same as no one buying. When you're in a recession, the answer to "what the use of having a lot of gold?" is "not much", but if you've let yourself get into that situation, what are you supposed to do about it? Sell for a loss, or wait for things to improve? It all depends on the gold owner's risk tolerance (and cash flow), there isn't a one-fits-all answer here. – CactusCake May 10 '18 at 21:11
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Gold is used to hedge inflation and currency risk. Really most commodities can serve this function, gold just happens to be the most popular one. People have an affinity to gold because the dollar used to be specifically backed by, and directly exchangeable for, gold. Similarly, if you wanted to choose a different commodity to serve as your currency/inflation hedge, gold is easy to store and won't go bad. It would be hard to hedge your assets with grains because those go bad, or highly utilized commodities like steel or oil because of various market demands. Of commodities, gold is relatively stable.

I agree with you, that people holding gold to be prepared for the zombie apocalypse have underestimated the other far more immediately pressing problems that would exist if you had to shave off bits of gold to pay for toilet paper.

  • So I should keep more many than I invest in gold? – watchme May 10 '18 at 19:40
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    You should certainly not put all of your money in gold (or any other single asset) – quid May 10 '18 at 19:41
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    People have an affinity to gold because the dollar used to be specifically backed by [it]... and because it's shiny, don't forget that part. People like shiny things ;-) – CactusCake May 10 '18 at 19:47
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    Gold will be useless in a zombie apocalypse because you can't eat it. Well, you can but it won't satisfy your hunger :->) – Bob Baerker May 10 '18 at 19:50
  • lol fair points! – quid May 10 '18 at 19:54

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