Gold recognised and accepted as a form of payment
Why has gold always been so precious and continues to be a precious metal, regardless of the period of history and the place where it is found? The answer lies in the very essence of gold and in its essential function, performed in the past as it is today.
It is no coincidence that gold was used as an authentic monetary reserve because in the past, it was used as, and to some extent, still is used as money. Gold can be counted, divided and transported, which is why its value has remains unchanged over the course of history.
But what are the other benefits of gold that convince investors from countries all around the world to consider it an acceptable form of payment?
Undoubtedly, due to its weight, which instantly determines the value of the object (in the case of cast bars, for example), its indestructibility over time and its distinctive appearance.
There is, of course, fake gold, but an expert can easily detect and recognise it. This all guarantees that gold always has great value, both in times of crisis and in times of wealth and abundance.
But let’s take a more detailed look on a practical level, at what the importance of gold is as a precious metal that is easily recognised and readily accepted as a form of payment. First of all, you should know that in just the last 200 years, gold has always managed to maintain its value compared to the rate of inflation. This means that the value of this precious metal (which allows you to purchase goods and services) has remained stable over time.
A practical and curious example of all this is the price and purchase of a man’s suit: in 1500, in England, a man’s suit cost the equivalent of an ounce of gold, a price that you can also pay now for a high-quality, tailor-made, modern suit.
For all these reasons, gold is considered to be a safe haven asset, as we have already seen in other articles on this website, because, while national currencies tend to fluctuate for various reasons and domestic or international problems, the value of gold remains relatively stable. And even if it suffers a downturn, it is guaranteed to bounce back in the course of the following months.
It is no coincidence, therefore, that a quarter of all the gold in the world is held by governments worldwide, central banks and other official institutions in the form of international monetary reserves. What does the future hold?
Currently, there is nothing to question the ability of gold to maintain its value over time.