People do pan. Also the mining companies that mine the gold have to hire laborers, they spend millions of dollars on machines and when you check them out, you see that it costs them quite a bit of money to get that gold out of the ground. In fact it costs them several hundred dollars per oz to get it out. A panner can get an oz out for just his time. A mining company cant. Plus the mining companies have lots of regulations. Just look at novagold. they are losing 161 million per year, yet they are sitting on billions of dollars of gold. And water is free, you dont pay $300/mo for the water. You pay $300 per month for the transportation of the water to you. If you dug yourself a well, it would be free, but instead you either do not want to dig a well, or you live on a place where you are not able to dig a well or there is no water under your property, but that was your choice to live there.
Just because people spend to mine gold doesn't derive its worth. Sort of like the assets in the financials. Just because you spent 1million on a mine or well, or whatever investment does not mean you have an asset worth that much or that you can get anywhere close to that in the market for that asset. It just happens that for people are gold stupid and will pay outrageous prices for something that does nothing. Plus, its not consumable there will only be more gold in supply. I still don't under stand. Why is it demanded? The question of why is it supplied is easy, merely because it is demanded. If its demanded because its demanded...
If you took all the gold in the US and distributed it to all its citizens, every citizen would have less than 1 oz of gold. Only about 158k tons of gold have been produced throughout history. By comparison, copper production is about 15 million tons per YEAR. Its also demanded because it can not be counterfeited, thats why it was used as money for so long. Even today, it can not be counterfeited.
Gold is money that governments cannot print or create out of thin air. This enables you to store your wealth no matter how much your currency depriciates.... .. .unless your government steals your gold.
he is right. the point being gold has value because it is naturally hard to conterfeit and has a value from not being easy to forge so it is the fall back medium of exchange. this is it value it cannot not be faked or reproduced so eliminates to the most part that risk.