Why is Gold Valuable?

By | April 22, 2022
Why is Gold Valuable?

Why is Gold Valuable?

Since many years ago, gold has always been identified with the concept of wealth. That when someone is considered rich, then others will definitely see how much gold he has. And vice versa. But, what exactly makes gold so valuable? Yes, why is gold valuable?

The value of gold as a store of value tends to be unique. This is because gold itself is not actually a very rare metal. At least for now. Meanwhile, when viewed from a chemical perspective, gold is also not quite attractive because it can react with other elements.

However, once again, gold’s brilliance and resistance to staining have in fact made this precious metal a valuable commodity. Not only as an investment instrument but also an ideal jewelry maker, and eventually become a currency that can survive.

Why is Gold Valuable?

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Well, for those of you who are curious about why gold is so valuable, here are some reasons:

1. Gold is an inert metal

Unlike iron, gold will not rust. We can leave a gold coin buried for 100 years, dig it up, and it will still be there, shining like when it was first minted.

Gold has a very long durability, unless it is physically crushed. This is another reason why gold is a great long-term store of wealth.

2. It has been recognized as money since thousands of years ago

100 years ago, we could go to a big trading city, pay something, and receive change in gold coins, and from all over the world. National government-backed currencies, on the scale we see today, are a relatively modern invention.

Until recently, kings and governments would print money (i.e. stamp the king’s head with gold coins), even if they didn’t use it.

The stamp on gold coins was a guarantee of the coin’s weight and purity, and also made counterfeiting a crime – often punishable by death in the past. But, we can use gold coins from anywhere, to pay for anything.

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And when a recession, crisis or even war comes, people will take gold every day, supporting the inflated government currency. Currency comes and goes… but not gold coins.

3. The government cannot print gold

In solving some economic problems, the government can sometimes solve it by printing more money.

In solving some economic problems, the government can sometimes solve it by printing more money. Every time the government does this, inflation occurs. It erodes the value of currency and it destroys wealth.

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But our government cannot print gold. If we have gold, and the government starts printing money and causing rampant inflation, we are safe. In fact, the purchasing power of gold will increase along with the decline in the value of the government’s currency.

Author: Margaretha Pablo

The world is cute and beautiful. That's why we need to write it. Sounds good right ;p

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