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Why Do We Value Gold?

Why Do We Value Gold?

The history of gold is intertwined with humankind’s social and technological progression. If you look back into the history of humanity, about 6,000 years ago, you can see just how strong this bond was. People have long had a unique fascination with gold and even made it a currency before creating money.

Gold has been a valuable metal for many generations. What's surprising is that the human perception of gold hasn't changed thousands of years later. People still hold onto it, and items made of gold retail at higher prices than those made from alternatives like silver.

So, why has gold retained its high value for thousands of years? This article will look into that and answer all your questions on the importance of gold. It also explains why gold remains expensive today and what you can expect about the value of gold in the future.

Here's everything you should know.

Why Has Gold Always Had Value?

Gold has had value since humans started creating civilizations. But why have humans valued gold more than any other metals they have discovered? Let's look into the four factors that have made gold valuable for years.

Gold and Politics

Politics heavily influence the value of gold. The world's strongest economies stockpile gold to protect their currencies. An attempt to empty the vaults of these countries could ignite a political firestorm since economies have relied on them for years.

For example, Germany repatriated gold from France and the U.S. This is because the German public had concerns about the state of the Euro. Without gold, there wasn't security that the economy could stand if the Euro collapsed.

Gold's Eye-Catching Beauty

In early civilizations, people couldn’t determine the chemical composition of gold because they didn’t have the technology or scientific knowledge we do today. However, they still understood gold’s inherent value. 

Gold has a natural appeal that's rare in other metals. Most metals in the periodic table cannot match the beauty of gold. Most of them have similar shades to silver. But the fact that other metals oxidize, rust, and become dull while gold shines for years makes gold valuable.

Gold’s Unique Attributes

Gold has unique chemical attributes that you won’t necessarily find in other metals. You can attest to this after looking at the periodic table. Most elements are gaseous, liquid, reactive, poisonous, or too difficult to extract in the early years. Gold’s stability is one reason why it emerged as the best.

It is malleable, and that makes it easier to extract and work with, unlike other elements. Besides, gold's chemical stability is one factor that makes it suitable for currencies. Although the chemical factors may not have mattered in the past, their discovery added value to gold.

Impact of Gold on Society

The human perception of gold is key to its high value. If the paper money we use today collapsed, gold would likely take over as a currency. You might not expect gold to replace money if it collapses, but that would eventually happen.

Humans won't go back to the barter trade system, which gold replaced in the early times. Gold, however, is stable, sustainable, and limited, which makes it the most logical choice. Thus, the fact that humans think that gold has value is one reason it does.

Why Is Gold Expensive?

Gold is still expensive today, thousands of years later. 

Here’s why gold is so expensive, no matter where it's bought and sold.  

Pure Gold Is Indestructible

A metal’s chemical composition greatly influences its value. Many metals rust, discolor, and corrode over time, making them unfit for use as currencies. Gold, however, doesn’t rust, discolor, or corrode – ever. That's why it’s so highly sought after and, therefore, expensive.

Universal Value

Gold has an intrinsic value across the world. Thus you can trade it in any gold market. This high liquidity makes it a significant investment today, as we'll see later.

Its universal acceptability is one factor that makes it expensive. For instance, gold bars sold by dealers such as Acre are portable, measurable, and storable. They can also trade in any market globally. That makes it difficult for the value of gold to drop even in the future.

Gold Has Industrial Applications

Gold’s chemical characteristics make it a unique metal. First, it doesn't react with any element, making it easy to work with and store. In addition, gold conducts heat and electricity, and that's where its industrial applications come in.

This means that you can make gold into almost anything you can think of, from fine jewelry to machinery. That's why you find gold in different kinds of electrical parts.

Central Banks Store Gold

Gold will remain expensive for as long as governments continue to hold it. The fact that governments worldwide hold onto gold has made the public hold it in high regard. If you own gold, it’s a form of financial security that you can convert to cash quickly.

Governments hold gold for almost the same reasons as you do. It offers them economic security in case paper money loses its value. In short, it is an asset with a forever substantial market value.

Gold Is a Great Investment

We have looked into the reasons why gold has retained its value for a long time and explained why gold remains expensive today. These insights provide a perfect foundation for anyone getting to know gold for the first time.

Now, why is gold worth buying? 

Well, you should find answers to this question before jumping on the gold bandwagon. As an investor, potential returns determine whether you'll buy an item or not. 

The Price of Gold 

Gold is a good asset because it is below its replacement value. You can only expect the prices of gold to go up in the future. This is because the cost of producing it continues to increase. Thus, gold is worth buying and holding on to—then reselling at an appropriate time.

Diversification and Gold 

It’s smart business sense to diversify your investments, and gold can play a major role in this. Having gold in your portfolio ensures that you do not lose all your investments at a go because of inflation or any other economic hardships.

Long-Term Value 

Gold has a long-term value that you may not find in other investments. See, the value of gold gets driven more by politics and less by economic activity. The fact that minor financial problems won't affect it makes it a perfect investment.

What To Expect From Gold in the Future

Ask yourself what the future holds for gold in regards to its value and whether it will continue to be expensive. Human psychology, as said earlier, has played a vital role in determining the value of gold in global standards.

Humans consider gold a go-to investment when facing uncertainty. It is a better bet than paper money when the economy faces recessions and depressions. Besides, there's a high demand for gold in industries and financial markets today.

In short, the value of gold will hold steady in the future. It will also continue to be expensive as people have utilized most of the world's gold deposits. The increasing demand for gold and reduced supply will see the prices for gold significantly rise in the global market.

Go for the Gold With Acre

Gold bar dealers like Acre make owning gold more affordable and convenient. Selling gold bars in smaller and more affordable sizes cuts down prices, allowing everyday people to become gold investors.

Acre’s $50 and $100 monthly subscriptions make it easy to buy beautiful gold bars from the comfort of home. Our 2.5g and 5g gold bars retain their value over time and come with a certifying assay card. When you buy with Acre, we’ll ship directly to you.


For information about Acre, check out our monthly subscription plans and follow us on social media. We’re happy to tell you why gold is your next best move.


Sources:
The history of the gold from 6,000 years ago to today - Milano | Orovilla.com

Germany Repatriating Gold From NY, Paris 'In Case Of A Currency Crisis' | Forbes

Three Reasons To Buy Gold Now | Forbes 

8 Reasons to Own Gold | Investopedia