Why Has Gold Always Been Valuable? – Everything You Need To Know!

Shining, sparkling, glittering, glistering, and more, are the synonyms replicating the most significant element on this planet earth – Gold. We all might think that what is that thing about gold that makes it so valuable. It is not just in this era, but gold has maintained its significant image in human civilization if you also see the previous generations.

Before we dive further into glorifying the existence of gold, let’s start with a quick overview of its history.

What is Gold?

Scientifically, gold established its existence through supernova nucleosynthesis from the collision of neutron stars, present in the dust, from which the Solar System constituted. There was no solid earth during its creation. The gold present in the beginning probably sank into the planetary core.

Why is Gold Precious?

To understand our attraction toward gold, let’s go back to ancient times. Our ancestors were cave-dwellers. They would have made it themselves or found anything they needed to survive nearby. As communities started forming, they began to exchange one commodity for another as a barter system – for instance, 5 cups of wheat in exchange for three apples or other items. However, this method became highly complex after some time. Because exchanging one item for another wasn’t easy due to no equilibrium.

So, people gave value to commodities. That’s how money took place. These societies used durables items like metals like iron or copper (the most long-lasting articles during that time) to exchange goods. So, they made coins out of these metals. But they soon realized that iron rusts and copper corrode. So, for instance, if you hold iron or copper coins in your hands, the weight gets reduced due to corrosion, and the value will also decrease, which isn’t fair.

Another problem was the availability. In ancient times, iron and copper were abundant, allowing everyone to make coins easily.

Shifting to Gold Coins

After tasting the water from every river and pond, they found gold to be the metal used for making coins. However, unlike iron or copper, gold does not rust or corrode, shines forever, and is not readily available to everyone. Here, silver was also a contender for coin making. And many societies used silver coins to make coins. But due to its quickly being tarnished and dull, the idea dropped out soon.

All these blessings in disguise had made gold like the “Blockbuster” of the ancient currency market. People then valued everything in gold. We even started creating beautiful ornaments and jewelry out of gold. And once that happened, instead of becoming only the medium to exchange, it became an emotion for us. We started judging ourselves based on how much gold we had. Gold also played an essential part in romanticizing relationships. For instance, we measured someone’s love for us based on how much gold they bought. That was the age when we valued everything in gold. As a society, we began to adopt that if there is gold, there is everything.

Is Gold Genuinely Worthy?

Gold is essentially useless. You can’t eat it, wear it, or create tools from it. Still, gold is everywhere – in edible items, cosmetics products, and even false teeth. In India, gold has another level of excitement as Hindus purchase gold on the day of Dhanteras as a token of good luck. As we have been associating with gold for a long time, one thing fixed in our minds is that gold is valuable. So, naturally, we use gold in marriages, auspicious functions, and other stuff if you closely observe.

In 2020, when the global economy was not doing well, and stock markets were falling, people were rushing towards buying gold. Because over time, gold has been established as a backup currency in society. For instance, if all monetary systems fail today, we would move towards gold as a measure of value.

The Golden Way Towards the Glory!

Gold has a long history and unique social status as a valuable metal. From the time of ancient Romans Egyptians to the current Government Treasury, there have been few influential metals such as gold. However, gold did not come up as money until 643 BC, but every dynasty could outline its value back to 30 BC.

Roman Empire

Roman Empire proved as one of the earliest users of gold:

• 30 BC – 14 AD: Emperor Augustus appointed the gold price at 45 coins/ pound.
• 211 – 217 AD: Marcus Aurelius Antonius altered the value of gold to 50 coins/ pound.
• 284 AD to 305 AD: Diocletian cheapened the gold value to 60 coins/ pound.
• 306 AD to 337 AD: Constantine the Great lessened it further to 70 coins to finance the military.

In addition, he also introduced extra taxes.

The hyper debasing of gold increased the inflation rate, causing trouble to survive for middle-class families during the increasing gold rates. That is why Roman Empire came to an end. In the subsequent empires, gold never stopped its journey toward becoming a valuable metal. Instead, Britishers did the work to enhance the value of gold by more than 10x. In the 1800s, most countries printed paper currencies, backed by their values in gold. This phenomenon was known as the “gold standard.” Countries kept enough gold reserves to subsidize this value. Great Britain kept gold at 4.25 pounds/ ounce until the 1944 BrettonWoods Agreement. After that, most developed countries decided to fix currencies against the U.S. dollar because the United States owned 75% of the world’s gold.

Current Gold Market

Due to the recent dip registered on March 8 as demand for the safe-haven assets raised by hopes of progress in peace discussion between Ukraine and Russia, the gold price shot down to its recent highs above $2000. As a result, the U.S. Federal Reserve hiked the primary gold rate by 25 bps. Though, this may sound like gold is not doing good in the market. But, this is not the situation, as the over-inflation has hit gold hard, skyrocketing its prices. 

What is the Intrinsic Value of Gold?

Intrinsic value is the measure of the worth an asset holds. In gold’s case, some people argue that it has zero intrinsic value. They claim that the modern economic loves paper money and gold is only worth making jewelry. However, some people still think that gold has multiple intrinsic qualities that make it significant and worthy for investors to hold in their portfolios. Moreover, they believe that investors are pretty bullish about gold and have many reasons to invest.

Should You Invest in Gold?

The recent stock market crises have increased the interest in gold among people. Moreover, as the world faces global economic issues, gold seems to be the safest investment option. However, it would be better to decide on your investment goals and portfolio.

Which Type of Gold is the Purest?

Usually, gold is available in its alloy form with other metals because it is very soft in its purest form. For instance, 24K gold contains a touch of copper to keep the gold in shape without unnecessarily bending it. Similarly, 18K gold is typically used for gold objects because it has better wear characteristics. Again, though, 99.99% pure gold is used for coins or bullion.

Tourmaline is a mineral made up of boron, silicon, and maybe some aluminum, iron, magnesium, sodium, and lithium. It is pretty on its own, but the ancients discovered it had a much more valuable property. For example, it tells the purity of gold once you rub the piece of gold on its surface. It is cheap, irrefutable, non-destructive, and quick.

Conclusion

Lastly, gold is an inevitable part of human civilization. From eatables to wearables, gold is everywhere. And its omnipresence has increased its value in the eyes of people. In this article, we have given a brief overview of how gold came into society. Moreover, we tried answering why gold has so much value? Starting from the Roman Empire, gold is still kept in the central Treasury. Hence, you can review the entire article again for better clarity on gold, its history, and significance.