When considering all of the precious metals that exist on the market for purchase today, it is clear that gold has won over the test of time as perhaps the "hottest commodity" of them all, remaining perhaps the most sought over and thusly valuable. Since ancient times, gold has been used throughout history as a relatively standard currency equivalent to that of paper money, often used in barter and trade deals.
During the century or so where the USD was indeed backed by these intrinsically valuable commodities, many of the coins were actually even made out of precious metals. However during this time, the value of gold saw major fluctuations within the world markets. Due to these fluctuations in value and the need to protect the United States gold reserves, the Gold Standard was suspended and reinstated several times, before it was finally removed in 1963. For the five years afterwards, until 1968, original treasury bills that had been issued by the United States government were still eligible for gold exchange, yet after this time and during the Nixon Administration (around 1971) any gold backing United States currency was replaced completely by a fiat economy system, which means that the "worth" or value of money is solely attributed by a faith in the government, versus being backed by any actual physical commodity.
However, there are plenty of gold's qualities that continue to suggest that gold still behaves much more similarly to a currency than like a commodity. For instance, its pricing in relation to other fiat currencies during the 2007-2012 global financial crisis, its regularly low correlation with other commodity prices, and the history of the gold standard regarding its role in central banking. Another shining example is the fact that one long-standing trend when it comes to gold is that history suggests that when the value of the USD declines, the value of gold rises.
There are certain properties that give gold its intrinsic value and worth. It is the most malleable and ductile of all of the metals, as well as rust-proof and an excellent conductor of electricity and heat. The density of gold is exceptionally high, at 19.32 grams/cm3, and other characteristics such as purity and karat rate affect its value as well.
No longer used as actual currency (nor as the true backing of money these days), history continues to suggest that gold is still valuable, and that it will long continue to be a standard upon which money derives its value, as well as continue to be a highly sought after commodity in the personal investment world and plenty of industrial sectors as well.
During the century or so where the USD was indeed backed by these intrinsically valuable commodities, many of the coins were actually even made out of precious metals. However during this time, the value of gold saw major fluctuations within the world markets. Due to these fluctuations in value and the need to protect the United States gold reserves, the Gold Standard was suspended and reinstated several times, before it was finally removed in 1963. For the five years afterwards, until 1968, original treasury bills that had been issued by the United States government were still eligible for gold exchange, yet after this time and during the Nixon Administration (around 1971) any gold backing United States currency was replaced completely by a fiat economy system, which means that the "worth" or value of money is solely attributed by a faith in the government, versus being backed by any actual physical commodity.
However, there are plenty of gold's qualities that continue to suggest that gold still behaves much more similarly to a currency than like a commodity. For instance, its pricing in relation to other fiat currencies during the 2007-2012 global financial crisis, its regularly low correlation with other commodity prices, and the history of the gold standard regarding its role in central banking. Another shining example is the fact that one long-standing trend when it comes to gold is that history suggests that when the value of the USD declines, the value of gold rises.
There are certain properties that give gold its intrinsic value and worth. It is the most malleable and ductile of all of the metals, as well as rust-proof and an excellent conductor of electricity and heat. The density of gold is exceptionally high, at 19.32 grams/cm3, and other characteristics such as purity and karat rate affect its value as well.
No longer used as actual currency (nor as the true backing of money these days), history continues to suggest that gold is still valuable, and that it will long continue to be a standard upon which money derives its value, as well as continue to be a highly sought after commodity in the personal investment world and plenty of industrial sectors as well.
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