Gold has been considered a valuable commodity since its discovery thousands of years ago, to the point where even today, many attempts to fake its properties, most commonly in what’s known as Fool’s Gold, exist.
But why is gold so valuable? Here’s what you need to know.
Historical Utility as Value
Irrelevant of historical events, gold’s use was due to its rarity and beauty, enough to be of interest to other people. As a metal, its low melting temperature and durability made it a useful store of value in luxury items such as coins and jewelry.
This tradition carries on today, where gold became an asset, whether that’s on somebody’s finger or in a bank vault. It’s often considered a safe investment.
In basic economic terms, where the Dollar’s value goes down over time ($1 buys you less than it used to) because it has an infinite supply, there is only so much gold in the world. So gold’s finite supply means as demand increases, the price increases.
From Mine to Market
Production costs to mine and produce metals and their end products have varied over the years. Technologies have increased productivity and price per gram. Similarly, the production cost has increased in certain areas due to gold becoming more scarce and harder to find.
It’s a well-known fact that just like FIAT money such as the Dollar, metals such as gold have had their supply controlled to avoid devaluing the end product.
If all the gold in the ground were to appear overnight, it would become worthless. Similarly, mines keep operating to avoid economic collapse and the cost of re-opening them once the supply’s drained.
Gold as a Luxury Item
When combining gold’s malleable properties with its store of value, it’s no surprise that it has symbolized wealth throughout history.
Gold’s most commonly worn to show that the individual owns it. Sometimes, it doesn’t even have to be clothing. Whether it’s gold turned into the crowns of kings and queens or your favorite rapper’s teeth studded with gold, it serves the same purpose. A representation of wealth.
As a symbol of love amongst the elite, gold became the must-have metal for wedding rings. And as gold rings became a popular gift, goldsmiths have become more and more adventurous over time with their lavish creations. A rose dipped in gold is not your every day gift. It represents something unique and special, something unique and desirable—the perfect gift for your loved one.
Modern society is giving birth to new creations of luxury. Mobile phone cases, cars, even pet collars can all come with gold in them.
Why Is Gold So Valuable in Today’s Society?
Now that we answered the question “why is gold so valuable?” you can see that gold’s value is in its history.
It’s easy for skeptics to refer to gold as a metal in the ground that’s no different from stones in your garden. But that isn’t true.
As you can see, it has evolved, and in today’s society, where people aspire to succeed and thrive, gold has become a multi-purpose asset that keeps increasing in value over time.
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