Why Is Gold More Popular Than Other Precious Metal?
If you look at gold from a scientific perspective, you’ll realize that the renowned metal is nothing but a metal that is extracted from the ground like other metals. What then makes it such a precious commodity with high investment benefits? To answer this, we need to understand gold’s historic and psychological aspects.
1. Historical Value
Gold emerged as an exchange currency around 1500 BC in the ancient empire of Egypt. Earlier, the metal was used to produce jewelry and decorative items due to its visual appeal. However, once gold became a medium for trade, its monetary value persisted and still exists. The association of a long history with gold is the reason why even governments still invest in it and have not been able to break out of the gold mystery.
2. Societal Value
From an elemental perspective, gold is nothing but an unreactive transition metal. However, its physical and chemical properties, like chemical inertness, are why the metal became popular as a currency. Most other metals are highly reactive with other elements. Who would want a currency that can react to become a gas or another compound entirely?
The few remaining metals had issues like corrosion and rare availability. Due to these reasons, gold was left as the only metal which could be utilized as currency. It has a unique color and texture, which attracts people. Its visual appeal and metallic properties became the reason why gold was deemed valuable. This value associated with the metal has survived ages.
3. Monetary Value
Gold has a large-scale market throughout the world. Its associated value is why central banks still hold gold reserves for times of economic instability or as an inflation hedge. Supply and demand, fundamental drivers of any commodity market, are quite consolidated for gold.
The metal’s supply is not subjected to risk factors like geopolitical differences because the presence of gold is not restricted to some regions. Due to all these reasons, gold is classified as a sound investment plan.
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