Gold is a store value, meaning that it can be stored or hidden away. It’s also a sign of wealth and prestige as we’re all familiar with the practice of wearing gold jewelry. This metal has been used throughout history as money, and people still clamor for it today to purchase things such as diamonds, cars, houses, jewelry and even wars.
How did it start?
Gold came into being as a precious metal and then became the first commodity traded alongside silver and copper in medieval times. One of the most important factors in the creation of gold is that it is alloys of copper, silver and, in greater amounts, gold. The name ‘gold’ comes from the Anglo-Saxon word ‘galdor,’ referring to any yellow metal. ‘Galdor’ was originally applied to gold, but later included silver and copper alloyed with gold.
Archeological evidence suggests that jewelry of yellow metal has been found in ancient civilizations such as the Egyptians, Babylonians and the Phoenicians as far back as 5000 BC! It was also used for religious symbols. The Ancient Greeks and Romans believed that the gods and goddesses were made out of gold.
Throughout the medieval years, gold was used for various purposes: as money, as a semi-precious metal and as a precious metal. We know that during this time many people considered gold to be a rare commodity, which made it more valuable. After the Middle Ages ended in the late 15th century, trade of commodities became more important than in previous centuries. The discovery of Americas provided Europe with an abundant supply of silver and other precious metals. This was followed by an abundance of copper, lead and tin that caused traders to seek everything with an extra value, including gold.
The discovery of gold as a commodity came in 1770 during the Aztec empire when Spaniards found Mexican Empire which was doing business with the Spanish Crown. Colonial rule was imposed and the Spanish Crown began to encourage mining of gold in Mexico. Soon the United States was discovered and became established as a country. Gold supply became abundant in the United States and gold started to be used as money by banks. However, gold was not officially recognized as a legal tender for a long period of time, which is why it continued to be traded in the form of bullion.
The American Gold Rush of 1849 caused people to look for gold in California, Oregon, Colorado and Montana. It was replaced by paper currency and gold became just a commodity. The search for gold continued until World War I, when it was used to exchange for financial securities.
Nowadays, gold is considered to be a commodity and its price fluctuates on the market according to supply and demand in the same way as any other commodity does, such as coffee and wheat. Gold is an important commodity not only because of its use in jewelry making but because of its properties that make it valuable in commercial trades. In the industrial sector, gold is used for its different properties such as corrosion resistance and conducting electricity like copper.
Gold has a high density i.e., it’s heavy and dense compared to other metals, which makes it easy to be transported in bulk. In addition, gold conducts electricity well through pure gold electrodes in electroplating processes such as electrophoresis, electrolytic smelting or electrorefining processes. Gold is a great conductor of heat and it has a high melting point which makes it an ideal metal to be used in making different types of alloys.
Gold is a precious metal that’s also valued as jewelry, due to its high luster and attractive color. The most important property for gold that makes it attractive is that it does not tarnish, corrode or rust easily. As such, gold remains attractive for jewelry even after centuries have passed.
Gold is a hard, dense and malleable metal, which makes it an ideal material for coinage. Countries worldwide have been minting gold coins for thousands of years as a means of recording trade. These coins are usually crafted with impeccable designs that represent the history and culture of the region they come from. However, U.S. coins minted from 1879-1933 and also post-1982 Canadian Maple Leaf coins are made of .999 fine gold, whereas other gold coins are .917 fine. In addition, Canadian Maple Leaf coins are .99999 fine gold.
Nowadays, investors around the world purchase gold to protect their financial investments against inflation. In addition, central banks and governments also buy gold because it has a lasting value that cannot be damaged by economic crises, interest rate hikes and other economic factors. Gold is a safe-haven investment for long-term investors and it is easy to store in the form of bullion or coins.
Gold is not only a great store of wealth but also an important industrial metal. A big advantage of purchasing gold is that it can be easily converted into cash and can be used as leverage against investments since gold is a real-time hedge against inflation, interest rate hikes and government downsizings.
Where does the term “store value” come from?
The phrase “store value” refers to something that’s valuable for saving or accumulating over time or when it’s scarce. According to Merriam-Webster’s Dictionary, “store value” means: “the monetary value of something that can be saved or accumulated and is not used up or consumed when it is used”.
Gold has been considered a store of value, especially in times when people believe there will be a shortage in the money supply such as during the Great Depression of 1929. Gold was also more highly valued during World War II, especially in Germany’s occupied countries. As taxes increased and paper money began to be devalued, people in occupied countries turned to gold as a way to save money.
Gold has always been considered as a store of value that’s beneficial for long-term savings and can be easily traded for cash. However, nowadays many people also sell their gold jewelry due to the increasing cost of living, economic crisis or simply the wish of making more money than what they could get if they sold their jewelry.
Should people buy and sell gold jewelry?
Some people say that if you want to make a large amount of money then you should sell your gold jewelry. Other people say that gold is something that adds value to the jewelry, making it more attractive to the buyers. Therefore, the prices of gold are rising and the best time to sell your jewelry is when gold has recently gotten a price increase. However, it’s not always possible for everyone to cash in on an increase in prices.
Gold is a valuable commodity that’s considered to be a store of value, particularly during times when money supply has been low or during events like the Great Depression of 1929. As such, it’s considered to be an industrial material in addition to an investment. Nowadays, gold continues to be used as an industrial material and is also bought by central banks and governments because it holds its value well over time.