Why is Gold Valuable?

Even since the days of early civilization, gold has been considered valuable for a number of reasons. Ancient kings lavished their palaces with gold at every turn and it has always been seen as a sign of wealth and power. Today, we consider gold so valuable because it’s beautiful, useful, and rare.

Gold’s Beauty

There’s a reason why there is such thing as a “gold standard.” From jewelry to interior design to fashion, gold is seen as one of the most beautiful metals available. But don’t just take our word for it! Scientists have actually studied why we are attracted to shiny things and it boils down to our thirst for water. Our genetic makeup draws us to the mirage of sparkling water and this translates to technology, fashion, and many other categories! Gold is the epitome of beauty and sheen.

Gold’s Utility

Not only is gold beautiful, it is also practical and used in a number of ways! It does not tarnish or rust easily, which has made it useful for many applications including being used within electrical circuitry. Gold has also been used as false teeth in the past because it doesn’t harm the human body as other metals might. Some even consider it the world’s most useful metal! Common uses for gold include:

  • Jewelry
  • Gold coins
  • Manufacture of electronics (gold is a highly-efficient conductor)
  • Dentistry
  • Medical uses (injections of small amounts of gold is sometimes used to treat arthritis!)
  • Space advancements (NASA uses gold in hundreds of ways)

Gold’s Scarcity

Finally, gold is rare and, as any self-respecting Economics 101 student will attest, value is derived from supply and demand. Due to its relatively short supply and the overall scarcity of gold, it has inherent value. In fact, according to Science Focus, all the gold mined throughout history would fit into a 20 meter by 20 meter square box. One reason why gold is so rare is because it is a relatively heavy metal, meaning that it is hard to naturally produce. It needs incredible levels of heat and pressure, such as a collision between neutron stars. No wonder it’s expensive!

But, gold is not totally unattainable. It can still be derived from mining, panning, or purchase. Its scarcity makes it extremely valuable, especially in the case of natural disaster. The US dollar continues to shrink, while gold holds (or increases) its value.

Gold is one of the most beautiful, useful, and rare compounds in our universe. It can be used for everything from beautiful jewelry to NASA spaceships. In addition to all those cases, did you know that it can also be used for retirement? Gold can be added to a 401(k) or IRA account as a diversified investment type. If you’d like to learn more or rollover your retirement savings into a Gold IRA, contact us today.

Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.