Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering

How do you measure the value of gold?
Intrinsic value is a myth.  There is no such thing.  Subjective human demand is the only thing that gives anything value.  This subjectivity is different person to person and can change very quickly. Historically there are two main uses for gold: jewelry and money.  How can you tell when a particular type of money is undervalued?  It disappears from circulation since people prefer to use money that is overvalued.  This phenomenon is paraphrased in Gresham's Law: Bad money drives out good money. The Coinage Act of 1792 established the US dollar as 371.25 grains of silver or 24.75 grains of gold.  This established a government ratio of 15 ounces of silver to 1 ounce of gold.  In the late 18th century there was a large production of silver from Mexico and the market ratio of silver to gold increased to 15.75 to 1 by 1805.  The government ratio, however, was still 15 to 1.  This was enough incentive for people to exchange their silver coins for gold coins at the government ratio, melt the gold, and sell the gold bullion overseas at the market value.  Thus, gold coins disappeared from circulation as people either hoarded the gold or sent it abroad.  People used the overvalued silver coins (i.e. the "bad" money) domestically and gold coins disappeared from the market. In an attempt to correct the problem of disappearing gold coins the Coinage Act of 1834 was enacted.  It kept the US dollar at 371.25 grains of silver but changed the definition to 23.2 grains of gold which established a government ratio of 16 to 1.  This was close to the market ratio of gold to silver at the time so both gold and silver coins appeared in circulation again.  The gold rush of 1849 produced a lot of gold and the market ratio of silver to gold became 15.46 to 1.  Now gold was overvalued so people began exchanging their gold coins for silver coins at the government ratio, melt the silver, and sell the silver bullion overseas at the market value.  People used the overvalued gold coins (i.e. the "bad" money) domestically and silver coins disappeared from the market. When you see gold circulating everywhere you will know it is overvalued compared to other types of money.  Paper money always drives gold out of circulation since the market ratio of paper to gold severely under values gold. Source here.