Why does gold have so much value? Isn't it just a shiny metal?

Question

Gold backs all the currency in the world. But why. I can understand how primative humans desired it with it being shiny, but what real value does gold have now other than the value we place on it?

Answer 1

Its rare. Its also nearly impossible to destroy. You can burn a dollar bill, but you can't burn a gold bar. Even if you melt the gold, its still gold. Combine that with its shine and ornamental appeal and there you have it. Plus, it is an essentially universal currency. Someone might be hesitant to take dollar, euros, rupees, ringits, etc, but anyone will accept gold.

Answer 2

There is no value to it other than the value we place on it. I think the main thing is that throughout history it has been considered 'precious' because it was rare.

Gold today is really the world currency. The US Dollar or Euro is just a note that represents a small portion of gold which the government(s) hold.

A big reason gold is gaining so much value right now is because of the decline of the US Dollar. Some people are afraid of a complete sell-off of the dollar, which would make the dollar valueless. If there was no value to the dollar, then the United State would (at least temporarily) revert back to exchanging actual gold as currency. Therefore, gold is considered a 'secure' investment.

Answer 3

Gold is an element which means by definition that there is no chemical or macro-atomic means to destroy it. The amount of it on the planet is constant, which re-assures potential investors.

Suppose you buy a share of stock in a company. The company later issues lots of other shares of equity in itself. By the simple principle of supply and demand, this drives down ("dilutes") the value of the one you're holding.

But that can't happen with gold. The "company" is the planet earth, or God if you please. And the amount "issued" is fixed forever.

Why not some other element, though? Well, there's the obvious fact that gold is in its natural form a solid, and an easily malleable metal. This means that it can easily be turned into coins, and those coins (or ingots) can be stamped with numbers indicating their value.

Also, yes, its shiny. But we can look more deeply into that. In psychological terms, gold is the sun and silver is the moon. Gold is kin to yellow/orange and silver to white. Gold is historically more valuable than silver, which just result from the fact that we as mammals are creatures of the day not the night.

An intelligent and civilized species of bats or other night-dwelling creatures might value silver, the moon, over gold. Buit we'll have to leave that to them. Maybe that's why bats spend all their time in caves. They're trying to get a mine company going!

For my "source" below I'm going to link you to a discussion of dilutive stock, which will document the point of my second paragraph above.

[Who is the sourpuss who gave me a thumbs-down for this answer? It isn't too profound but is an honest reasonable effort to address the question. What gives?]

Answer 4

it has no other value but reality check and the facts on the ground are if you posess gold the world probably wnats to listen to what you want to say

Answer 5

1) wearing gold on body, helps us in some internal way,,
that i m not too sure how but they say it does,,

2)IT NEVER RUSTS,, even silver turns black after reacting with Sulphur-di-oxide in the air,,but gold remains shining and looks new even after 15 yrs,,

3) its 2nd least reactive metal,,least reactive is platinum (i think thats why platinum is the costliest metal and gold is 2nd costliest),,

^_^

Answer 6

If there were more of it, it would be cheaper and more ubiquitous.
It's nice to know that your treasury isn't going to rust away.

Answer 7

It's rare and shiny, and it has a very unique color. But that seems like a useless thing to fight for.

Answer 8

Its only valuable in relation to currency. Which as we all know is not edible.