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Why is gold so valuable?Posted on: 3rd November 2011 By Anita
In human society we have developed various systems and methods for trading goods and services. Over time most cultures have come to use paper money as the preferred method to exchange value. Paper money is light, portable, uniform and generally non-degradable.
In some places in Africa, shells were used as currency. Ancient Roman soldiers were at times paid in salt (“worth their salt”). There were also societies that had used a type of seed as a symbol of value. The difficulty with all those items was that once they have turned into a symbol of value, it may have been easy for people to find, make, steal or collect more. Normally what gives things value is how scarce, unique or rare they are and if the unit of currency is in plentiful supply (or becomes so) then inflation may occur. Meaning two carts full of shells (or paper currency) are now required to trade for a wagon of wheat.
Precious metals are different – it’s hard to get more. This creates a control over how much is available to everyone (supply and demand). Value is influenced by how much can be mined every year and how much is coming onto the market for sale. Gold’s excellent properties and aesthetic appeal have made it highly popular in jewellery and electronics.
Gold is the most malleable of all metals, it does not corrode and it’s virtually indestructible. Almost always found in pure form in nature it calls attention to the beauty of its colour and brightness. For these reasons, gold in ancient Egypt was already the favourite material for the manufacture of jewellery and other ornaments – and since then has never ceased to be associated with symbols of prestige and power. Their rarity also makes it extremely valuable. If these metals were in abundance, this would not happen. Gold was only adopted by England in 1821 – before then silver was the monetary metal. About 40% of the world’s gold came to be reserved by central banks of the richest nations, to guarantee their money’s worth.
Good time to sell gold
With prices up again now is a great time to make extra money from selling your old unwanted jewellery. The New Zealand dollar has also been showing signs of weakness, pushing the price of gold and silver even higher.
Call Gold Smart today and book an appointment with us. Our friendly and professional team will be ready to assist you selling your items in an easy and transparent way.