Try picturing yourself sitting patiently in a stream as you swirl your pan with water and diligently looking for gold and someday become rich. Believe it or not, America has a long history of gold mining since the 1850s. It isn’t really surprising because up to this point, gold holds a valuable place in world’s economy.

But why is it so Valuable?

Back in earlier times, the luster and malleability of gold has led to its mainstream use of early coins and jewelry. Additionally, it’s hard to mine and the harder something is to acquire, the greater the value it commands. As time goes by, people start using this precious metal as a mean of facilitating trade and at the same time, accumulate and store wealth. As a matter of fact, aside from engaging in FOREX trading in 2020, it is possible to trade precious metals too, which includes gold.

The truth is, the early paper currencies were supported by gold with each and every single bill printed corresponds to a certain amount of gold that’s kept in vault somewhere where it can be exchanged. Basically, this approach lasted until the 20th century. These days though, modern currencies are majorly fiat currencies. Thus the link between paper money and gold has been discarded. On the other hand, this doesn’t stop people from loving this precious yellow metal.

 How does the Demand Rise?

 

By far, the biggest demand for gold is jewelry. Believe it or not, this accounts for over 50 percent of demands for this material. The 40 percent is from doing direct physical investment in gold such as:

  • Medals
  • Coins
  • Bullions and;
  • Gold bars

Bullion is actually a coin or gold bar stamped with the value of gold it carries and its purity. It is different compared to numismatic coins for these are collectibles that are being traded based on the demand for specific kind of coin compared to the content of gold it has.

Investors of physical gold do include central banks, individuals and just recently, ETFs or Exchange-Traded Funds that buy gold on behalf of other people. Gold is typically viewed as the safe-haven for doing investments. If paper money were to become worthless for whatever reason, the world’s economy would fall back to something of great value in order to keep facilitating trade. This is among the reasons why investors keep pushing up the value of gold when there’s a volatile financial market.

Post Author: Shawnee Sabryna

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