Why is gold valuable?

robsmith32 said

some reason, i don't believe that.. at least in late 70's they had what seemed like a couple hundred feet worth at fort Knox alone.

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i'm sure someone knows more about this than me, but I remember reading somewhere that pure gold is extemly soft, and will ,in sense, stretch. So, wouldn't they have to add a substance to harden it, making it bigger than it really is? Of course, I could be wrong.......