There is a lot of information about people who buy gold bullion as a safe-haven investment but very little is written about the social and psychology aspects of having gold.
Gold’s intrinsic value
There are people who believe that since gold isn’t used as money it has no value. They believe that it is only good enough for making jewellery and that its monetary value is something that belongs in the past. However, there are a lot more people and institutions that see the valuable asset that gold is and how the benefits of investing in it and not putting all their faith on fiat currencies. These are the people that are always looking to buy gold.
Gold’s Essential Duplicity
The jewellery trade takes up much of the gold the is produced however, gold isn’t only valuable because it is used to make jewellery but it is an important material used in electronic components, medical applications, cellphone industry and so much more. We can then agree that gold will always have value because of the importance of these industries and because it is used as an investment. In addition to all these tangible reasons there is another characteristic of gold which adds to its value: the mystery of its appeal. Since man first discovered gold, man wanted to get as much of it as possible. It is human beings who decided that gold has the value that it has, who decided that it was a symbol of power and wealth, that it was worth fighting wars over and wiping out entire civilizations. And so for centuries people have been buying and selling gold and will continue to do so for centuries to come. So, you can always sell the gold that you have whenever you need liquidity at any point in time.
People attach a good experience to the word “gold”. You can say you “feel golden” or you’ve “had a golden day” and the next person will understand exactly what you mean. So gold can be associated with a personal experience or it can be objectified when it is used as a system of exchange. This is the only commodity that has this duplicity. Gold is tangible and quantitative like money, you can buy or sell gold but it can also embody something ephemeral lime a feeling. This is the reason why gold has had value for as long as it has: it is linked to the psychology of the human experience.
When our ancestors needed to find a better exchange method than the barter system, they found the coin to be a better medium. Of All the metals they could have chosen, gold came out tops. They could have chosen other metals like iron, copper, lead, silver, platinum, aluminium but these metals corrode over time and they would lose their value when stored for a long period of time. It took time for us to get to a point where we could create metal alloys that corrode slower. Besides, it would have been labour- intensive for them at that time. Gold is also heavier than most other metals, it feels substantial and therefore valuable.
Gold and the psychology of societies
Gold is considered a safe-haven investment. If modern fiat currency economies collapsed, panic would set in as people would have no means of buying the most basic essentials. Gold however will still remain valuable. In fact, gold would become the most sought after commodity in the world. We see now with the Corona Virus pandemic how the price shot up and how economic analysts are predicting the price of gold to go as high as $5,000. With so many countries on lockdown, businesses have been forced to close down and people have lost their source of income. Soon, countries will have to face socioeconomic issues like a rise in unemployment due to businesses collapsing and other pressures. Basic things will also become more expensive which means that fiat currencies like the dollar that are already losing their values will not be able to buy as much as they used to. Scientists say we might be months from finding a vaccine and when we do we would still have to wait for tests, manufacture and deployment. This could drag of for two years but the economy could take years to recover. This is why people have been buying as much gold as they can because when times do get tough, you can sell gold to keep yourself afloat.