It is difficult to find any other commodity that would financially be as useful as gold. This is just one the basic reasons allowing the precious metal to maintain its eminence over generations. Can you imagine some fruit, for example bananas being used as currency? Fruits are perishables and differ with regions and thus can’t contain value. The same holds true for all biologically living beings.
You may argue diamonds are valuable too. Some of their characteristics like hardness are better than the yellow ore. But, what if you break one into a couple of pieces! Though the collective weight of all pieces remains almost the same as that of the original diamond, the worth of each piece would be different and the combined worth of all pieces would be than that the original diamond. Moreover, unlike the yellow ore, you can divide diamonds equally. You can melt the yellow metal, give it different shapes by bending or breaking it, but its worth remains unchanged.
It Needs to be Mined: It is Scarce
It could be the number one reason for the yellow precious metal to thrive while currencies pass away. Nothing can be simpler than producing paper money.
Governments can print as much as they want. It’s a simple law of economy that scarce goods possess value. No one can guarantee that any paper currency will become rare enough to remain valuable. We need to invest time, labor, and equipment for locating the precious metal to enhance its supply. Though its demand keeps fluctuating with time, its supply is stable and can be predicted. Its stability and predictability are excellent for investors. For all practical reasons, its supply shall continue to be scarce.
