What gives value to precious, luxury things?

Question

What makes things precious? For example Gold, Silver, Diamonds, etc. Once they were unknown to human being. And now they are the more pricey things.

I guess its just the way these things were marketed into the world, Demand and Supply control makes them pricey, there are a lot of other metals too in the world, which are more expensive then gold, but they are not that much poplar or in demand.

Similarly if we look into brands, Gucci, Armani, Micheal Kors, etc. Once they were unknown, no one knew about them. But now, they are the most expensive brands in the market.

I know in brands companies cash their name, that's why they are too pricey. But my concern is what exactly makes things precious and pricey.

Answer 1

Only a surplus on demands will make things "valuable". So it is about the price level accepted by those who demands it, and the demands can be from essential needs to status show-off.

If you read Netherland history, you will notice there is a period of non-existence luxury goods, due to the shape of religious culture that forbids show off.

OTH, there is also terrible rent seeking like monopoly that make essential goods pricey.

Answer 2

Because stones like diamonds for example are rare on earth and takes millions of years to be synthesized (carbon).

For the Giffen goods ( luxury ) it is a needs to show your social value thought the things you have and buy. And also the pleasure to have some ancient and high quality goods.

The market perception make it more pricy too ( more people want is when they see others craves for it) it is a psychology law due to our evolution ( tribes, stay conform etc).