Why is gold so valuable?

Since ancient times humans have been fascinated by gold. The relationship that we have acquired with gold is very particular, and that is that no other metal has a similar value and functions throughout history.

Gold has been worked as an ornament and has been used as a form of tribute payment for about 5000 years. Since then it has contributed to the greatness of great empires, although it led to terrible outrages and wars due to human greed. But why is gold so valuable?

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What is gold?

Gold owes its name "aurum", a Latin word that means "bright dawn". In chemistry it is known by the acronym "Au", and it is a heavy metal with malleability and ductility properties. Its main characteristic is that it does not react with most chemical products, being only dissolved in cyanide, chlorine, mercury or bleach.

In nature, gold is found in its pure state in the form of nuggets or in alluvial deposits. To which the human being discovered gold he attributed the greatest "purity" of all metals. Its scarcity helped it to be considered as a unique metal and distinguished from the others.

First indications of the value of gold

The first finds of runes with worked gold objects are about 4,500 years old. They were found on the Bulgarian coast of the Black Sea, although there are other remains with gold from about 3000 years ago in other places such as Egypt or Northern Europe.

It is not known exactly why the gold should have so much value, surely mystical properties are attributed to it. But there is no doubt that from then on it will forever be the most desired metal in the world.

Gold began to be a reference of value for different human groups, and jewelry and coins began to be made. It also had other uses such as the manufacture of dental implants by powerful people, but these are more anecdotal cases.

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The value of gold in ancient times

The development of man was linked to gold, being an element that marked our history. Gold is related to the arrival of great empires and commerce. Egyptians, Persians, Greeks, Phoenicians or Carthaginians used it as tribute and in their commercial relations; the merchandise was exchanged for gold and vice versa.

The expansion of the Roman Empire promoted the circulation of gold in the form of coins, as did the expansion of Islam. Since then the value of gold will always be the most stable asset value for humanity, regardless of the collapse of great empires that amass their fortune in the form of gold.

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Modern age

During the Middle Ages, gold continued to be the most precious asset, but it is in the 16th century when its value as a global asset acquires more importance. In the discovery of America by the Westerners, gold was the most important loot for the conquerors, especially for the Spanish.

In the meeting that took place in 1519 between Hernán Cortés and Moctezuma II, the former and his troops dispossessed the Aztecs of the gold they treasured. In the Aztec Empire it was the most powerful on the continent and they also established a system of payment of tributes on numerous peoples, gold being also a metal with great value.

The gold stolen from the New World financed the luxury of Old World capitals, the modern banking system, and the industrial revolution.. In this period, gold has a lot of value around the world, and Europe is appropriating the wealth of different world deposits.

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Contemporary age

During the nineteenth century there was a great collective madness known as the "gold rush". In new territories like California it was easy to find gold in the first place. This caused thousands of people to move there and in other areas of the world such as Australia, Canada or Alaska to exploit new deposits.

World War II also had an impact on the value of gold. The United States was already a new industrial power, supplying the Allies with weapons and other necessities. He demanded as payment large amounts of gold that he accumulated in large reserves and served to strengthen the dollar as the new global currency.

In 1971 Nixon removed the backing of gold from the US currency, which many economists have viewed as the beginning of the currency's decline. Some believe that it is currently being supported thanks to the so-called “black gold”, that is, oil. This measure has an expiration date for obvious reasons, and that is that the oil is going to run out.

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The value of gold today

The gold that exists on Earth is limited, that is, there is no way to produce it. The alchemists for centuries tried to find the formula to obtain it but they failed miserably.

There is no other way to produce new gold than to extract it from mining deposits. Today the largest gold producers in the world are China, Australia, Russia and the United States. The truth is that there are many more countries that produce it and there are cases in which it serves to support the national currency.

Although the price of gold has ups and downs, it is still one of the safest resources against inflationAlthough only 20% of the planet's total gold is used as reserves or investments. 70% is used in jewelry and the remaining 10% has industrial uses.

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Gold types

Carats are used to measure the purity of gold, and the purest gold of all has 24 carats. Gold of this purity is too soft to be used in the form of multiple objects. To be able to use it for a multitude of purposes, it is alloyed with silver or copper. This gives rise to different color tones (such as the so-called "white gold" and new properties of the material, already having 22 or 18 carats.

But the gold that is used the most is the one with 14 and which is called "medium gold". The "low gold" is 10 karat and is only 42% pure. There is also an alloy called Goldfield, an alloy with brass that does not contain more than 5% gold.

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Bibliographic references

• Ali, S.H. (2006). Gold Mining and the Golden Rule: A Challenge for Developed and Developing Countries, Journal of Cleaner Production, 14 (3–4), 455–462.

• Postan, M.M. and Miller, E. (1987) The Cambridge Economic History of Europe: Trade and industry in the Middle Ages, Cambridge University Press.

• Rodríguez-Pardo, J. (2009). They come for the gold, they come for everything. Buenos Aires: Foundation Center for Integration, Communication, Culture and Society (1st edition). Argentina: CICCUS Editions.