If you’re wondering why gold is so valuable, you’ve come to the right place. It’s a soft metal that is surprisingly shiny. However, its value is tied directly to supply and inflation. And, although it’s indestructible, it’s a hard currency. Inflation and supply are inextricably linked, and this makes gold more expensive than most other commodities. Since gold’s supply is limited and rarely changes from year to year, investors treat it as a hedge against inflation. Read on to find out more about gold and why it’s so expensive.
Solid gold is used in jewellery
There are several benefits to buying solid gold jewellery. It is hypoallergenic, durable, and not easily broken. Additionally, solid gold is more expensive than gold-filled jewellery. It is more difficult to restore and degrade over time. You can also choose from solid sterling silver or 9k gold for a lower price. But keep in mind that solid gold is a better investment than gold filled. The material is also better for the environment.
It is a hard currency
Among the simplest explanations of why gold is an attractive investment is its ability to retain purchasing power over time. Unlike other assets such as stocks and bonds, gold is not printed or debased. As the centre of the monetary system, gold has a high purchasing power over the long term. It also retains its purchasing power when currency values fall. Moreover, it is a “hard currency,” meaning it cannot be devalued by the government’s printing press.
It is indestructible
One of the most enduring qualities of gold is its indestructibility, making it an excellent choice for high-performance applications. While this makes it incredibly expensive, it’s also an attractive material for many industries, including dentistry and jewelry. In addition, gold is malleable and completely resistant to corrosion, making it an ideal material for use in these applications. This means that a single gram of gold can be formed into 165 metres of wire or a square meter of film. As an added bonus, it’s also non-corrosive, making it a durable material that will last for centuries.
It is a precious metal
One of the most popular forms of gold is in jewellery. This yellow metal is soft, malleable, and dense. It is used for many different applications, including electrical connectors in computers, infrared shielding, coloured-glass production, and tooth restoration. Gold is also used as a radioisotope, anti-inflammatory drug, and alloy for restorative dentistry. While it is not an ideal material for jewellery, gold is still a very valuable metal that many investors have a fascination with.
It is less affordable than silver
While the two precious metals have similar properties, they are both more expensive than silver. Silver is less expensive than gold largely because of its higher supply. Over the course of history, about 1.74 million tons of silver have been mined, compared to just over 198,000 tons of gold. Despite silver’s lower price, it still offers many of the same advantages as gold. Here’s a closer look at how each compares.