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Posts Tagged ‘buy gold’

People have been fascinated with gold for centuries; it is mentioned in repeatedly in the Bible and the ancient society of Aztecs called it ‘god excrement’, such was its significance. Since 25BC it has been mined and due to the high demand for this precious metal most of the gold ever mined has stayed in circulation. From the gold rushes of the nineteenth century to its usage in jewellery, the fascination with gold has ceased to wane for hundreds of years. There are other precious metals, such as silver, palladium and platinum, so why is it that gold continues to be so popular across all cultures and traditions?

There are many uses for gold but arguably one of its most significant is its place within the history of currency. Gold was used as a standard economic unit from the Byzantine era onwards and since then has been used variously as currency or an investment. However there are more romantic notions associated with gold, namely its use in jewellery.

Gold as a jewellery-making material was first pioneered by the Egyptians who incorporated coloured glass into gold settings to make pieces they wore in both life and death, signifying everything from fertility to power. As gold is fairly soft and pliable, therefore meaning it is easy to create exactly whatever jewellery you desire, it is partly for practical reasons that its use in jewellery arose. Its famous bright yellow colour and lustre, however, are also why people just cannot get enough of gold.

Whether the economy is good or bad, gold has always been a popular choice for investors, but especially so during periods of economic volatility as an alternative to stocks and bonds. This trust in gold during a very unstable time implies that gold is a safer investment when it is difficult to predict how the economy will turn.

There are several reasons why gold is considered a ‘safe’ investment. A major factor in this is because of its track record; gold has managed to hold its value remarkably well throughout good and bad economic periods. Even during the Great Depression and the World Wars, gold did not fluctuate with nearly as much unpredictability as the stock market. This proven value means that many investors feel safer knowing that their investments will not create them huge losses, compared with investing in stocks.

Another important factor to remember is that gold is not only an asset to invest in; it is also a commodity. The electronics market use gold extensively, and it is rapidly expanding markets such as these which create much of the demand for gold. Luxury markets such as luxury jewellery and watches also create demand for gold as their customer profiles are less likely to be damaged by economic downturn and therefore make gold a good investment that will not suddenly cease to be in demand.

Gold is a precious metal that has been mined at countless locations across the world for thousands of years. This timespan of gold mining, without any indication that its popularity is waning, implies that gold has something extraordinary that has captured hundreds of generations; and indeed it does. This is, quite simply, that gold is not just a precious metal used for making jewellery, but a vastly adaptable material; this is what has ensured its continued popularity along the centuries.

Possibly the most obvious use of gold is of making jewellery. The first people to use the precious metal were the Egyptians who combined gold and coloured glass to make talismans; the use of gold, and particularly giving it some kind of significance through making jewellery, has continued since and can be seen in the popular tradition of gold wedding rings. Gold is extremely ductile, which makes it perfect for shaping into jewellery, although copper or palladium is often added to give it more strength for longer-lasting pieces. By creating these alloys you can make pink, white or blue gold depending on the metal used, and these have also found a following in the jewellery world.

Another, hugely significant, use of gold is within monetary exchange and investment. Used many times over history to create a ‘gold standard’, whereby a single monetary unit in worth a fixed weight of gold, it is also the topic of much debate between economists. It is a widely-held belief that gold is a hedge for inflation, thus making it a safe haven against any socio-political factors that affect the economy. In this way, gold is considered a safe investment and therefore has maintained popularity as a worthwhile asset.

It is natural for investors to look to reduce any potential losses during periods of volatility within the economy by investing in assets that will not lose value dramatically. For several reasons, gold is a conventionally accepted choice during these economic fluctuations.

During economic crisis, investors often try to invest in assets outside of the stock market which is vulnerable to loss because of its link with the economy, which would lose them money. In this situation gold is a wise choice of investment because gold’s value is not linked to the economy, unlike stocks. Gold has been used as currency in countless civilizations throughout history, yet isn’t linked to a specific economy or government, which makes it a globally recognised currency. While it isn’t completely impervious to variations in value, these changes are not linked to the economy and therefore are less likely to create losses.

Gold does not depreciate in value, partly due to the fact that it is not only an internationally recognised currency but also a commodity. Hence, during unstable periods, gold is a wise choice; stocks can fail but gold will not, or at least not to such a drastic extent. It will always be in demand, not least because large markets like the electronics industry and the jewellery market use it extensively.