NYU Professor: Gold May Be Overpriced, Driven by Fear and Mistrust

Imagine gold is like a popular toy that suddenly became super expensive.

A smart professor named Aswath Damodaran looked at why this happened.

Usually, this toy gets expensive when there's a big problem in the world, like when prices for everything go up a lot (inflation) or when people are scared about the economy.

But lately, the toy got much more expensive even without those big problems.

The professor used two ways to check if it's too expensive: he compared its price to everyday prices (like groceries) and to the price of another shiny metal, silver.

Both comparisons show the toy is much pricier than it used to be, suggesting it might be overpriced.

He thinks maybe the old reasons why the toy became popular don't apply anymore.

Now, people might be buying it because they don't trust big banks or governments, or because they're worried about global politics and trade fights, or because it's easier than ever to buy a little bit of gold.

He also points out that while gold is seen as safe, it hasn't made as much money over the long run as other investments like stocks, and buying and selling it at the right time is very tricky.