Why is gold considered so precious and why does it have such high prices?

Why is gold so highly valued all over the world and throughout history? What satisfaction do people get from this ridiculously expensive metal? The main usage of gold is in jewelry but is it really worth spending such insane amount just to decorate your body? After all it is just a shiny, ductile and non-reactive metal. Do these properties justify its rates? Isn't there a positive feedback loop in Gold's valuation i.e. more people want it so it's value goes up and since it's value goes up even more people want it and the cycles goes on? http://tracking.bitgold.com/aff_c?offer_id=23&aff_id=60153