Blog Why do we Value Gold so Much?

Why do we Value Gold so Much?

Today, well into the 21st century, gold remains a popular investment. So, why is gold valuable, which is just one of the 118 elements on the Periodic Table? Why not choose another metal?

It turns out that, when compared to all the 118 elements, gold is perfect as a form of currency. Gold doesn’t corrode and can be melted over a flame. This made it easy for ancient civilizations to turn gold into coins that could be used for currency.

When looking at the other elements, the liquid and gaseous ones aren’t practical for currency. Iron, lead, copper, and aluminum make more practical sense, but they all corrode over time. Then you have the “noble metals” like platinum and palladium. They produce little corrosion, but they’re too rare.

So, we end up back with gold and silver, which are perfect as stores of value.

The value in gold’s unique beauty

As a currency, gold has no intrinsic value, but neither does paper currency. Any type of currency only has value because as a society we decide it does.

Gold meets the litmus test as a currency because it’s rare, stable, portable, and non-toxic. Gold is also valued because, well, it’s so beautiful. It is the only precious metal or metal in general that has a naturally yellow or golden color.

We’ve always valued gold

Humans began valuing gold almost as soon as its discovery. One of the oldest known uses of gold comes from Bulgaria around 4600 B.C.E., according to research from 2000. Archaeologists found buried human remains adorned with gold at a Bulgarian site called the Varna Cemetery. Gold was discovered in many of the graves, which suggests the ancients used gold as a status symbol.

Why is gold valuable? The concept of gold currency began in the 6th century B.C.E.
An ancient Roman gold coin part of the Roman collection at the Yorkshire Museum. Source: Wikimedia Commons

It was not until the 6th century B.C.E. that people began to use gold as government-backed coins. Researchers discovered evidence of this in the Near East and Mediterranean states, where royal authorities stamped gold with symbols to show it was backed by the government. The concept of gold currency persisted well into Medieval Europe.

Gold’s value has only increased over time. Historians say that one of the chief motivations for the Spanish conquest of the New World was gold. European nations raced for global power to conquer land and territory but also to accrue as much gold as possible.

Gold’s preeminence continues

Today in 2021, gold is still highly valuable. The gold price reached a record high of $2,067.15 per ounce on August 7, 2020, and many people continue to invest in gold as a hedge against inflation and store of value against a declining paper currency.

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