Gold is a store of value and therefore an investment option for private individuals. Gold is rare and difficult to mine. Gold is malleable and can be shaped as required, including for use in electronics, dentistry, medical tools, and the defense, aerospace and automotive industries. Gold is accepted as money almost everywhere in the world.
In fact, this has been the case for thousands of years. This makes gold extremely valuable for all types of crops. For example, if you wanted to buy oil in the Middle East, they might not accept your home country’s currency if it breaks down. However, it is almost guaranteed that they will accept gold.
Gold could be far more efficient at storing wealth than cash. Interest rates remain low, meaning that your money in the bank “yields virtually nothing,” reports CNN Money. When you factor in inflation, that money may have actually lost value. Since it first attracted people’s attention, its luster and color have given gold considerable decorative appeal. This is reflected in the fact that almost half of this mined gold was processed into jewelry.
To get gold, you have to be good at warfare. Be able to mobilize an extensive human workforce to reduce it. Mastering global delivery and logistics routes Be able to command guards who guard your gold and don’t steal it. You must have the technical know-how to get gold out of the ground, which is expensive and cumbersome. And this heap of gold only grows by a few thousand metric tons per year, or 2% of the current global gold stock. The one thing that really gives gold its value is the fact that almost all countries have their own government gold holdings. This was known as the gold standard, and while governments moved away from this standard in the 1970s, central banks continued to hoard huge amounts of gold, amounting to around 35,000 tons, or around a fifth of the amount of gold ever mined.
One of the most striking things about gold is how incredibly difficult it is to obtain it (and keep it once you have it) and the various things you have to master to get gold. While most investors, myself included, were afraid of gold due to its high-risk, low-return track record, there is a case for owning gold as it can add value at the portfolio level. In times of crisis, whether it’s war or economic slowdown, investors have often fled to “safe investments,” such as gold, where an ounce of physical gold is more attractive while the share of a single stock or the wider index falls. This is due to the huge investment market that surrounds gold, with the amount of gold traded daily far exceeding the total physical supply of the metal.
Apart from its limited uses in electronics and dentistry, gold is only valuable in human society because it is gold and nothing else. Some experienced gold owners prefer to limit their risk of global instability rather than protect their wealth with cash and gold reserves.