A gold price correction?

Most valuation is objective; an income stream is discounted or asset values totted up. Even for difficult to value commodities, economics lends a hand in the form of marginal cost analysis. Gold, however, is an exception. It is amongst the most difficult asset to value. It produces no income, has no industrial value and, because all the gold ever dug up throughout history is still around today, new mine output is only marginally useful in price discovery. Instead, the price of gold depends on how you view gold. If it is, as many claim, just another commodity, it looks mighty...

Most valuation is objective; an income stream is discounted or asset values totted up. Even for difficult to value commodities, economics lends a hand in the form of marginal cost analysis. Gold, however, is an exception. It is amongst the most difficult asset to value. It produces no income, has no industrial value and, because all the gold ever dug up throughout history is still around today, new mine output is only marginally useful in price discovery.

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