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Why Purchase Gold?
Humans have sought after precious metals for almost as long as civilization has existed. Among these metals, gold seems to have the most popular place in history. Gold has been used as currency, jewelry, adornments, and many other purposes. These are primarily aesthetic purposes, which perhaps came about for two main reason: gold’s unique color and its resistance to tarnish. While gold is beautiful, many resources were spent obtaining and securing this soft metal that had very little applications in a time when all resources were much more precious than today. In some ways, it seems like humans have some sort of natural attraction to the metal and its beauty.
Modern Demand for Gold
Especially since the invention of electricity, the functional applications of gold beyond aesthetics have become increasingly apparent. Gold is now used in many industrial process and it has become particularly important in the world of electronics. The demand for gold will continue to rise as more devices, processes, and applications call for it.
Another reason the demand for gold has increased dramatically in recent years has more to do with its perceived relationship with currency. At one time, the controlling governments of the world held gold reserves as a means of backing up their paper currency. In the US, this system was known as “The Gold Standard”, which ended officially in 1933. Today, governments still stockpile gold, but currencies of the world no longer inherit their value directly from a physical commodity like gold. Despite this mass transition to fiat paper currencies, for people and cultures around the world: gold is inseparable from the image of money.
The financial crash of 2008 began a surge in gold demand as individuals around the world lost faith in fiat paper currencies. Gold was looked at as a more stable alternative for storing wealth than paper monies or the compromised economies of the world. Today, much of the world is still struggling to recover from that crash and as of yet, its still uncertain how long this struggle may continue for.
Gold is a Long Term Investment
All of these factors are huge contributors to the value of gold: from the historical beauty that was mostly tied to aesthetics, to the increasing demand for gold in industrial processes and consumer electronics. These demands on gold aren’t going away anytime soon and coupling these factors with the financial demand for gold only increases the potential for scarcity as time moves on.
Watching the price of gold on a daily scale won’t render any real insight into its actual value. Gold is a long-term investment. Overtime, the demand for gold will only increase, which means that the overall claim on the remaining stores of gold in the world will get larger and larger as the supply gets smaller.