"We have gold because we cannot trust governments." — President Herbert Hoover
The symbol of kings and the treasure of nations, desired by all but possessed by few, gold has been cherished for all of recorded history. Aristotle pondered the question of the perfect medium for money in the 5th century B.C., and concluded that gold was the perfect money for the following reasons:
Durability
Gold does not rot, break, crumble, decay, corrode or tarnish, and it is unaffected by air, water and most acids.
Divisibility
Gold can be divided into smaller amounts, which allows investment at lower entry points. An ounce of gold can be split 100 or even 1000 times.
Consistency
One ounce of pure gold is exactly the same as any other ounce, enabling worldwide trade and enhancing gold’s liquidity.
Demand
Gold has a wide variety of uses, even more today than in Aristotle’s time. Its unique properties and relative scarcity keeps demand high. Investor demand has recently been steady and has historically increased during times of crisis and periods of global instability. Due to its relative scarcity, the supply of gold from stored inventory and from mining operations is limited and is likely to remain so.
Gold Uses
In addition to its reputation as a store of wealth, gold has a number of unique properties that make it invaluable to industry. These properties include:
These characteristics have contributed to gold’s status as an essential component in a wide range of industries, including electronics—computers, telephones, cellular phones and home appliances—aerospace, telecommunications and health care.