Gold is an asset that has been recognized all over the world for its rich history and its high and stable value. Additionally, it has been closely propelled commercial activities and the social culture of different people for thousands of years. For instance, coins partly made of gold were first used in 650 B.C while those made purely of gold are traced back to the era of King of Lydia almost a century later.
Over the past centuries, gold has consistently been used for a myriad of varying reasons. To begin with, societies and economic jurisdictions established a gold price, forming the basis for value growth. Fundamentally, it is a valuable metal that is used in case of other currencies in the world collapse. This means gold will always retain intrinsic value and can be used to protect wealth during recessions.
In the current times, prices of gold and silver have been relatively steady, compared to the dramatic variability witnessed in the stock prices. For instance, the price of gold has only ranged from $1725 to $1825 in the last 100 days. On the other hand, silver prices have fluctuated between $21.50 and $26.50, recording a range of $5 in the same period. Compared to stock prices of companies like Tesla or cryptocurrencies like Shiba, such price fluctuations are very meager and less exciting.
Unfortunately, many people wrongly think precious metals are not attractive assets to own and hold because of their “boring” and relatively rigid prices. However, investing in gold or silver does not mean you miss out on other opportunities. There are many different ways to own gold from home storage gold IRA’s to ETF’s to owning the physical. They all have their pros and cons.
In this article, we will briefly examine some of the reasons why humans love dealing in gold and silver for commercial and cultural activities.
The Scientific Features Of Gold
Gold as a precious metal is a very unique commodity with qualities that are lacking in bitcoin or Tesla stocks, eliminating competition for funds between gold and stock investments.
In this section, we will show you the science behind the sourcing of gold without delving into the operations of gold mining companies!
One of the reasons why people love gold is that it comes from stars, i.e., gold only comes from the explosion of huge stars after colliding with each other. Theories used to explain such phenomena include the Big Bang Theory.
Collisions and explosions of very powerful stars such as neutrons are the only way to generate the energy needed to add neutrons to make the element bulkier and help in the conversion of gold from iron ore.
Such kinds of star explosions are powerful enough to spread and scatter atoms of newly formed gold to all parts of the universe.
Before gold conversion, iron is an already stable and heavy element on its own. However, upon turning into gold, the chemical structure of the newly formed product is perfectly stable, and it does not react any further with any other element. It is the ideal level of consistency of the product’s quality.
For greater clarity, let us compare gold to another metal type. For instance, copper combines with oxygen in the atmosphere causing the metal to rust and turn green. On the other hand, gold is not chemically reactive. This means gold will retain its shiny appearance for a long time (forever) and under different conditions. This is why gold is loved by many people.
Other Reasons Why We Still Love Gold After So Many Years
Notably, gold has been found below Stonehenge and had been made into a dagger dating back more than 4,000 years ago. More research indicated the gold had been sourced from a mine located in Ireland.
There is another unique and useful reason for the love of gold. It can be divided time and again into tiny pieces of gold without affecting the price of gold measured on a per unit weight.
This may sound a bit confusing at first but it is quite easy to follow. For instance, the same cannot be said about a diamond. If we cut a big-sized diamond into 8 smaller pieces of the same diamond, the price of the smaller diamonds will not cumulatively add up to the price of the big one.
In simple terms, larger diamonds are worth more than smaller diamonds, simply because of the variation in size. However, gold and silver can be divided into smaller bits and the price per ounce will remain the same.
For this reason, gold and silver have been used as a currency for many years. On the other hand, a diamond cannot be used in place of a currency in any country of the world. This is because the diamond would lose some value every time it was divided into smaller pieces to allow people to make a change.
Reasons Why Gold Is A Rare Commodity
#1. The star explosions needed for the formation of gold atoms are extremely rare occurrences. This is why gold deposits are few in the world. These types of star explosions happened before the formation of the solar system and are unlikely to occur again. This means the volume of gold in the solar system is limited.
#2. Gold is a bulky element. This means that a lot of gold deposits on the planet are situated deep inside the earth’s core, making it difficult to mine and lift the precious metal to the earth’s surface. It is estimated all the gold that has been mined in the past can fit into 2 Olympic-sized empty swimming pools.
Many people seeking to profit from gold usually look for areas where gold is near the surface and in large concentrations to justify the establishment of a profitable gold mining venture in the locality. Also, there are very rare sites where gold exists closer to the earth’s surface.
Below we show how little gold reserve exists on the crust of the earth in comparison to other types of elements.
Gold Is Exceptionally Rare
The question is, how much are you willing to pay for the most durable element in the entire universe? That is what it will cost you to buy gold!
Gold and silver are not as sensational as many people will find bitcoin and other cryptocurrencies. However, gold and silver are generational assets – the value of gold and silver is stable and will outlast Bitcoin.
In reality, the “boring” part of gold makes gold a stable investment compared to stocks or other assets. Its price goes higher each year as investors seek stable economic options amid all the market volatility and political risk.