Why gold is valuable? This question may seem simple, but actually it is a good question that requires the right answer. Gold and silver as an investment here.
Since the past, hundreds or even thousands of years ago. Gold is a valuable history and valuable in ancient times.
In the history of human civilization, gold is a popular asset, many of which use gold as jewelry.
So it’s not surprising then the question arises why is gold so valuable?
Well, in this article I will try to uncover the veil to answer the question about this one asset.
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Contents
Gold is unique
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Gold has unique properties, one of which is due to the chemical elements contained therein. On the periodic table of elements, gold has an atomic number 79, and the symbol Au.
Gold is a soft metal, so it is malleable but also quite strong and not easily broken. Gold is not stained, rusted, or corrosion or easily reacts with other elements.
This asset capable to maintain its luster over time and does not require maintenance to maintain its luster. In fact, many collectors are looking for ancient gold designed in the era of ancient civilizations.
The uniqueness factor mentioned above. Made the early civilizations throughout the world turn gold into a treasure trove, works of art, jewelry, and coins money. Its become a reason why is gold so valuable historically.
In modern times, gold is even more useful because gold can conduct heat and electricity. So that some companies make electrical cables using gold as one answer from a question of what is gold used for.
Even now there are many smartphone applications that make gold a digital asset. Investors no longer need to go to a gold shop to be able to buy gold. They can use the gold buying application on certain platforms.
And the value of gold always fluctuates, it’s possible to decline and rise. Gold is also valuable because of its rarity. It is estimated that all the gold in the world if collected will form a cube measuring only 25.25 meters on each side.
That is a very small number compared to the size of the Earth which is very large.
Gold economic value
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Some analysts say that the price of gold does not depend on the amount of demand and supply, but is more influenced by the currency market.
For example, in 1999 and 2000 there was a very high demand for gold jewelry but the price of gold remained low.
Some analysts claim that the price of gold is closely related to the exchange rate of the USD.
The value of gold will increase because of the level of confidence in the dollar weakens.
Gold is actively traded on world markets and is seen as a safe investment place during difficult economic times.
Because gold will always maintain its value, because gold has intrinsic value, while currencies and stocks do not.
Many people consider gold a safe haven asset.
Why is gold the standard for money?
Before using fiat money, gold is the currency by society, all people accept gold.
There are several types of metal in the world, but why is gold the standard for money? why not copper or platinum?
To become a standard currency, an element must meet the following four qualities:
- First, the element is not gaseous, because gas is very impractical for currency exchange.
- Second, the element must not corrosion (rust) or easily react with other substances.
- Third, the element has no radioactive properties and does not cause allergic reactions for most people.
- Fourth, the element must be quite rare but not too rare so it is impossible to find.
Why the noble gas cannot be used as a standard for the currency even though the high-priced precious gas, because of standard currency not gaseous.
Due to quality requirements, Elements such as pure lithium not met the requirement.
Because it will react and burn when exposed to water or air, while other elements such as an iron will be rust over time. Of the 118 elements contained in the periodic table. There are only five elements that meet the four criteria above, namely rhodium, palladium, platinum (white gold), silver, and gold.
Even though silver has been used as a currency, silver sparkle is easy to fade.
Rhodium and palladium were only discovered around the 1800s, so they have not been used in the early civilizations of the world.
While platinum has a melting point of around 1,600 degrees Celsius.
So early civilizations have not been able to forge and process it. And all that’s left is gold, so gold is the only currency standard in the whole world.
Where gold can be found?
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In many countries, gold is a valuable asset reserve in anticipation when experiencing economic disruption.
Gold is often deposited by the Central Bank. Gold is seen as a safe investment as an alternative if currencies such as the dollar are under pressure.
Various countries save gold in anticipation of war, a slowdown in the world economy.
In the latest example, various world political phenomena such as Brexit and the Trade War make the price of gold even more sparkling.
Here are seven countries that have the world’s largest gold reserves.
- United States – 8,133 ton – USD 373,4 billion.
- Germany – 3,369 ton – USD 154,7 billion.
- IMF – 2,814 tonnes – USD 129,1 billion.
- Italia – 2,451 ton – USD 112,5 billion.
- Prancis – 2,436 ton – USD 111,8 billion.
- Rusia – 2,168 ton – USD 99,5 billion.
- China – 1,885 ton – USD 86,5 billion.
How gold is be formed?
Gold is a precious metal that has a unique character and is a valuable asset, but where is gold found in nature?
There is research conducted by researchers from the University of Bristol. Gold comes from meteorite collisions more than 200 million years after the Earth was formed.
In research published in the journal Nature, during the formation of the Earth, molten iron sank into the center of the planet to form a nucleus.
This liquid iron does not enter the bowels of the Earth alone but brings along all the precious metals.
These results were obtained by researchers after analyzing rocks from Greenland, which were nearly 4 billion years old. They claim that these ancient rocks provided knowledge about planetary composition.
After the formation of the Earth’s core but before the meteorite collision occurred. According to high-precision measurements of two isotopes or atomic variants.
Tungsten (another precious metal that is also rare) shows that meteorites containing precious metals hit the Earth.
These meteorite collisions then coated the Earth with gold, platinum, and other elements long after their original counterparts disappeared into the planet’s core.
After these precious metals enter the Earth’s core, the geological process then forms the Continent and concentrates the precious metal in today’s mining pockets.
Whether true or not this research, because humans never know for sure when gold arrived on earth.
According to the researchers, gold should not exist on earth, if there was no process as described by the researchers.
Do you believe it? Everything is up to you.
When gold discovered?
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No one knows exactly when gold discovered.
Archaeological findings and prehistoric studies have not been able to ascertain when humans first started mining gold and used it as a precious metal.
Precious metals have also been found archaeologists in the plains of Spain, found in caves and estimated age of the precious metal ranges from 40,000 BC.
One of these findings can be concluded that the discovery of gold by humans is uncertain.
Gold is a metal that is unique compared to other metals.
Gold is so valuable that it often leads to disaster, and even gold is often the trigger for a war based on power.
In ancient Egypt and the plains of Iraq, gold has become an ornament.
Then the discovery of gold coins in ancient Egypt as an exchange rate, precisely 3000 BC. Maybe they as first who discovered gold.
In the year 2500 BC also found jewelry made of gold, precisely in Abydos Egypt and the location of the discovery which is located in the tomb of King Zer.
King Zer is the First Egyptian King’s Dynasty — this discovery is at once a proof that gold is a symbol of eternal glory and beauty.
Benefits of gold investment
Gold has been proven throughout history in ancient times to modern times, it still has a high intrinsic value. Many central banks buy gold as financial reserves or backups. This asset is also easily found in various places, wherein big cities or on the outskirts of the city many gold shops have traded gold.
This is an asset that is easily resold, so when you need cash, just go to a gold shop and sell your gold then the cash is immediately in your hands. In 2020 the price of gold has soared and formed new highs, gold has reached the price of USD $ 19,000 per troy ounce.
This is closely related to the weakening of the dollar in which the United States injected large amounts of funds into various companies to restore the economy. And this is vulnerable to inflation with the money supply while the economy is still slow.
Final thought
Gold is a precious metal that is not known when exactly discovered, from time to time is a metal that is sought after as a valuable asset.
The value of gold is not affected by inflation, and since the days of our ancestors, this is a symbol of prosperity and glory.
Even today gold is still a valuable asset, a country that has the largest gold reserves in America is a country that has a great influence on world civilization.
If you save gold at this time, you have chosen safe savings for the future, because this is also quite liquid, when you need money, you can immediately sell the gold back.
And we will never be losing word to talk about gold.
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