Why Is Gold Valuable – There Are Many Reasons
Gold has been used for centuries as a monetary source and symbol of wealth as well as for decoration and jewelry. According to the National Mining Association, civilizations as far back as 4,000 B.C were using gold for decorative purposes. Over the next 2500 years gold was used as jewelry and buried with Pharaohs in Egypt.
By 1500 B.C. gold was accepted as a standard exchange in international trades and gold coins became common place in the Middle East. Over the next few centuries gold sparked such events as the first American Gold Rush in 1803 and the California Gold Rush in 1843.
By 1913 the United States passed the Federal Reserve Act which requires that funds in the United States be backed by at least 40 percent in gold.
In 1934 the United States government stopped production of all gold coins and laid claim to all monetary gold and by 1990 the United States had become the world’s second largest producer of gold.
When people think of gold, dollar signs follow close behind. We all know that Gold has has a high price tag but why is gold valuable? Let’s have a look…
Gold Is Scarcer Than You Think
So, just why is gold so valuable, if you were given the choice between a 5 karat diamond and a ounce piece of pure gold taken straight from the ground which would you say is more rare? If you said the diamond you’d be wrong. One reason that gold is so valuable is because of supply and demand. According to gold.org you are more likely to find a 5 karat diamond than a one ounce pure gold nugget.
Gold’s Many Uses
While about 60 percent of the gold supply is used to make jewelry the rest is used for a variety of different projects including wiring and pieces in electronics. In fact, 12 percent of the gold market is used for technological purposes.
Uses of gold in technology include power wheelchairs, onboard computers in spacecrafts, and transmitters in telephones, in phone jacks, television sets, medical equipment and lasers.
Because gold can be used for so many different things and it is considered a rare mineral which also contributes to it’s value.
Is White Gold As Valuable As Yellow Gold?
In its most natural form gold is yellow. When gold is used to make jewelry it is first made into an alloy by adding other metals such as copper, silver, nickel or palladium. When white gold is alloyed silver, nickel and palladium are used to achieve the ‘White’ gold. Because white gold contains the exact same amount of gold as yellow gold they are equally valuable.
Which Is More Valuable Gold Or Platinum?
For a many years, in fact decades platinum held a higher spot price than gold. But in the fall of 2011 the tables turned and gold prices reached an all time high of $1,922 per ounce, while platinum dropped to $1,538 per ounce by the end of the same month. At present gold value has been declining while platinum is rising steadily. As of this writing gold price per ounce sits at $1,641.86 while Platinum sits at $1,563.74 per ounce. So if you are asking which is more valuable gold or platinum, the answer is today gold has surpassed platinum in value.
I suspect a time will come when Platinum will again surpass Gold in price but it is my belief that the uncertain world economy has lead to many people turning to gold as an investment thus driving it higher in price. As a matter of fact gold is currently priced higher than Rhodium which I find surprising due to the scarceness of Rhodium comparatively speaking.