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0 pointsmobiletelephone8y ago0 comments

Most precious metals are worth more than their industrial applications. I suppose you could say that their value is derived from trust in the stability of their market prices.

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jstanley8y ago

If they're worth more than their industrial applications, how can it be economical to use them for their industrial applications?

If gold-plated contacts cost more than they're worth, nobody would make any as it would have a negative ROI.

I agree that the market cap of gold is higher than it would be if industrial applications were the only source of demand. But given that gold is used for industrial applications, it must not cost more than it is worth for those applications. Hope that makes sense.

skewart8y ago

If they're the best material for the job then manufacturers will pay the inflated luxury-good prices. People selling gold are selling it at market price, regardless of what their buyers do with it. Just because something only adds X amount of value, however that's defined, doesn't mean that one will be able to buy it for at or less than X.

jstanley8y ago

I was asserting the opposite: if it adds less than X amount of value, nobody would buy it for X.

That it sells for X proves that it adds at least X amount of value.

j / k navigate · click thread line to collapse

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jstanley8y ago

If they're worth more than their industrial applications, how can it be economical to use them for their industrial applications?

If gold-plated contacts cost more than they're worth, nobody would make any as it would have a negative ROI.

skewart8y ago

jstanley8y ago

I was asserting the opposite: if it adds less than X amount of value, nobody would buy it for X.

That it sells for X proves that it adds at least X amount of value.

j / k navigate · click thread line to collapse