Investors seek gold to diversify their portfolios and protect against market turbulence. People from around the world keep an eye on the daily gold price to keep track of their investments.
But what makes gold a precious metal? We explore what’s behind the value of the rare metal and why investing in gold is worthwhile. We also explain why people worldwide long for this most valuable of metals.
Historical Significance
Gold has been treasured since ancient times. The Egyptians used it in their burial rituals, placing gold in pharaohs’ tombs as a sign of wealth and status for the afterlife. In ancient Rome, gold coins were used as money (known as currency), setting the standard for trade and wealth.
Throughout history, gold has symbolized power and has been a reliable form of wealth across different cultures. Its long-standing role in global trade and as a trusted store of value highlights its importance today.
Gold Has Tangible Value
Besides having a rich and long history as a medium of exchange, gold also has tangible value. Unlike digital assets, stocks, bonds, and shares, you can physically hold gold in your hand.
While it’s not recommended that you store gold coins or bullion in your backyard, many investors appreciate the physical nature of gold. Precious metals can’t “evaporate” overnight, and their value is less vulnerable to market swings.
A company can crash and burn overnight, leaving investors high and dry. But a bar of gold remains a bar of gold, no matter what the markets are doing.
Gold also has a variety of industrial applications, which further supports its value. Thanks to its malleable nature, conductivity, and resistance to oxidation, gold is used in: Electronics manufacturing, Dentistry and medical tools, Defense, automotive, and aerospace industries.
Currently, 6% of mined gold is used in electronics, 37% goes to bullion, 9% to medals and coins, and 47% is used in jewelry.
Emerging Markets and Gold Demand
As emerging markets grow, their demand for gold increases. Countries like China and India have seen a surge in gold consumption, driven by rising incomes and cultural affinity for the metal.
In these markets, gold is often seen as a secure investment and a status symbol, further solidifying its value.
Future Trends in Gold Investment: Gold remains a cornerstone of investment portfolios, with new financial products making it more accessible to individual investors.
Innovations such as gold-backed cryptocurrencies and digital trading platforms are expanding the ways in which people can invest in gold.
These trends suggest that gold will continue to be a key asset in both traditional and modern investment strategies.