SIR – The argument that the gold price is far too high for a metal with few industrial uses is a common, and weak, one (“The wacky world of gold”, June 4th). You wrote that, “If investors ever wake up and notice that the yellow metal is little more useful than tulips, the gold bugs will be burned.” But industrial usefulness does not define value, and here’s a simple example: take one £20 note and consider the paper’s industrial applications. Now burn it. See what I mean?
Investors in gold understand that its geological rarity and industrial uselessness combine to produce an incredibly stable stock quantity, the exact utility that savers demand from sound money and something they’ll not be getting any time soon from a major currency. Or tulips.
The Economist would do better to wake up, and try to understand why it has been consistently wrong about gold, instead of being condescending to investors who have been right for decades.
The fine art of British insults: