[laurencerowe]

That's a win for society if the money is instead invested into something productive!

[oraphalous]

But it's a loss if it's forced into risky investments that aren't productive.

[jkhdigital]

People choose to hold non-yield-bearing assets when they believe the returns offered by current investment opportunities are not sufficient to justify the risks.

It is the miracle of modern capital markets that enables almost anyone to quickly and easily invest their savings in productive assets, but of course capital markets aren’t perfect. The availability of “none of the above” options (like gold) that remove savings from the pool of active investment capital is the essential feedback loop that balances risk and return.

[AlotOfReading]

Modern capital markets also have non-yield-bearing assets like gold ETFs. The only practical difference is a tiny expense ratio and more liquidity.

[WalterBright]

I never invested in gold because it is not productive. I don't have any money, either (other than pocket money), because I've invested all of it.

Gold is usually invested in as a hedge against inflation. It's not really the gold that goes up and down in value, it's the dollar that goes down and up.

[pfannkuchen]

This is an oversimplification IMO. There are higher order effects on the price of gold that makes it not directly related to the value of the dollar.

I'm pointing this out because I have seen a lot of sentiment recently about how the dollar is crashing, just look at the price of gold. Yes, the dollar is decreasing in value faster than usual, but it also isn't crashing in the way that gold is spiking.

This sentiment I think drives speculative gold demand, from standard speculative investing FOMO as well as from emotionally driven inflation fear well beyond what is realistic. The same thing happens to the stock market.

[fjordofnorway]

Given that the gold and the dollar are not productive I think one is betting that society is less productive than inflation when one invests in gold and that one will need to pay a ransom over a long weekend when one holds dollars.

[pqtyw]

Gold was worth about as much in nominal(!) terms ~2006 as it was in back in 1980 then doubled in a couple of years. Doesn't seem like a very good hedge but rather a very volatile speculatory asset...