Just like silver, gold has been used in jewelry and other ornamental purposes since ancient times. This precious metal that has been used as money for thousands of years. So the question is; will gold always be valuable?
Gold’s long-term worth has never been affected by short-term price fluctuations. It has worked as a buffer against inflation and the depreciation of major currencies over the years, making it a worthwhile investment. It is one of the most commonly used and valuable commodities in the world.
It has been valued for its beauty and rarity, but it was also sacred to many cultures because it was thought to have magical properties. Gold is also perhaps the first use case for a digital, decentralized currency. That being said, gold has been used as a currency for thousands of years prior to becoming widely adopted.
The History of Gold
The international monetary system has historically relied heavily on gold. Around 550 BC, King Croesus of Lydia ordered the first gold coins to be produced. Lydia, now in modern-day Turkey, is where gold coins were first used as a kind of legal tender in ancient times.
Before paper money was introduced, several countries utilized gold as a kind of payment. Even after the introduction of paper money, currencies were still linked to gold. As a result, the paper money could be exchanged for gold and utilized as a form of reserve currency. This relationship between money and gold has been around for a long time.
For example, in the late 1800s, several of the world’s most important currencies were tied to gold at a set price per ounce. For over a century, this was known as the Gold Standard, and it was used in many ways. During the gold standard, the financial system was able to freely interchange paper money and gold.
Except in nations like the United States, where the currency is tied to a different commodity, most currencies have maintained this norm. Only a few nations still utilize the Gold Standard to back their currencies and financial systems, as it finally failed.
Gold Trade
Camel’s travel through the Sahara desert dates back to the 5th century. Soon, these caravans became a yearly event, with gold as the primary product traded across the Sahara. The increased need for coinage demanded a spike in gold demand. Many Mediterranean economies, including the Soninke Empire in Ghana, relied on gold as a currency.
A large amount of gold and salt was sold, and Arab merchants traveled to Ghana and Mali in pursuit of riches. Ancient Ghanaian kings and chiefs amassed enormous fortunes by hoarding the purest gold and selling the remainder to their people, who then sold it for profit.
In the aftermath of Ghana’s triumph, the Mali empire had bigger success in the gold trade than Ghana had. That’s the fundamental reason why it was so successful for them. The gold producers didn’t convert because they relied on traditional beliefs unrelated to Islam in their exploration and production of gold. Long-distance trade relied heavily on gold and salt.
Sahara
Mansa Musa’s trip to Cairo with a ton of gold in 1324-25 brought the gold market in the Sahara area to a screeching halt. The tremendous quantity of wealth he took to Mecca on his pilgrimage as the richest man in history caused the whole gold market to crumble. His is a unique and lengthy tale of gold that merits more exploration at a later date. There have been a few times in history where the supply of gold in any one region has surpassed the demand at the time.
On his trip, Mansa Musa used his gold loot to build hospitals, schools, and mosques for the people he met along the road and many other examples of gold being utilized for good. Timbuktu is another historic location where gold was widely used, and its gold coins had no superscription or mark.
How We Use Gold Today
Today, gold is used as an investment and is also used in jewelry and industrial applications, like gold plating. Gold has also found its way into cryptocurrencies like Bitcoin. While gold has traditionally been used for currency and jewelry, it is now being used as an investment.
Investing in gold is a very popular way to use gold. Gold has traditionally been used as currency, but it is now being used as an investment. People can buy gold to increase their savings or use it as a form of insurance.
Investing in gold may be done in a variety of ways. The most common method is to invest in gold in an Individual Retirement Account (IRA). Taking advantage of these tax benefits as an investment is a good idea.
Even if you invest just a small amount, the long-term profits from such an investment will always be sufficient to provide you with a comfortable old age. The value of your investment can also be controlled by purchasing stock in a gold mining firm.
The Future of Gold
Gold is one of the oldest metals, making it ideal for safe storage. This makes it an excellent option for those who want to protect their wealth. In addition, gold is also a very safe way to store wealth, as it is durable and does not corrode, tarnish or break down over time.
The precious metal has also been in high demand for a very long time, making it one of the most stable assets to invest in. One of the most appealing aspects of gold is that it is a very stable investment. When thinking about the future of gold, there are several factors to consider.
First, the U.S. dollar is becoming less stable, which may make investors seek out other currencies as a safe haven. Second, gold prices are expected to remain relatively high due to increasing demand, especially in emerging markets. Third, technology is making it easier than ever to invest in commodities. As cryptocurrency and blockchain technology becomes more mainstream and mainstream investment options become easier to access, investors may start to use the same methods they do with commodities, such as gold.
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Bottom Line
The history of gold is quite fascinating, as it has been used in different forms throughout different cultures and eras. Gold is a safe and reliable investment, especially in the long term.
When considering the future of gold, there are several factors to consider, such as the stability of the U.S. dollar and the expected high demand for gold. Gold is one of the first use cases for a decentralized currency, and it has been used as a form of currency for thousands of years. My guess is it will probably stay an important and safe investment method in the years to come.
I hope this article was helpful and that you found it interesting. If you have any questions, we will be more than happy to answer them below.
All the best,
Pete