Why Do We Value Gold?

When you get right down to it, gold is just a metal, an element with its own distinctive properties -like all the other elements. But we have chosen it to represent the very idea of value, using it as a symbol of wealth and an exchange medium, or money. We can understand why compounds and organic material isn't used this way -they have a tendency or at least an ability to change. But what makes gold different from the other elements?

An article from the BBC asks University College London chemistry professor Andrea Sella, who runs through the periodic table of elements and points out why every other element would not work for the purpose of a rare but stable measure of value. He eliminated all but silver and gold, and silver is also used as a measure of value, although gold edges it out because silver tarnishes. But even gold has its drawbacks. The U.S. unhooked the value of its currency from gold in 1973 because our population and need for currency outgrew the supply of gold.

In the 16th Century, the discovery of South America and its vast gold deposits led to an enormous fall in the value of gold - and therefore an enormous increase in the price of everything else.

Since then, the problem has typically been the opposite - the supply of gold has been too rigid. For example, many countries escaped the Great Depression in the 1930s by unhitching their currencies from the Gold Standard. Doing so freed them up to print more money and reflate their economies.

These days, the price of gold has fluctuated too much to provide a stable currency, but we still treasure it because it's rare -and it's pretty. You can read why all the other elements, even the rare ones, were eliminated at BBC magazine. -via the Presurfer

(Image credit: British Museum)


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