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Home Banking Money Why Is Gold So Expensive?

Why Is Gold So Expensive?

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There are three reasons why people have always placed a high value on gold : its beauty, its usefulness, and its scarcity. If iron were as scarce as gold, it would probably be just as treasured. Gold is a soft yellow metal. It is one of the heaviest chemical elements. A cubic foot of this metal weighs over 1,200 pounds. Gold is also one of the most easily worked metals. Gold is so easy to hammer and shape that less than 1/25 of an ounce of gold (one gram) can be beaten into a sheet 6 feet square.


Unlike most metals, gold does not tarnish in the air. (You know what happens to silver, for example, when it is left lying about). Gold remains bright and shiny indefinitely. And this is probably the reason why people first valued it. Gold is also one of the least chemically active metals. It reacts with only a few acids.


 

The most common use of gold has always been as money - Although coins were also made of metals other than gold, their value were also questioned, but the value of gold coins never was.
By 1914 gold was the measuring stick of almost all the currencies in the world. This means that dollars from the United States, francs from France, euro from Germany, and so on — all had a set value in terms of gold. At anytime the currencies could be changed into gold. This system is known as gold standard and is no longer in use, but gold is still important in international trade.


There are a tremendous number of uses of gold. About 10 percent of gold produced each year is used by jewellers. Gold is used in dental work. Since gold conduct electricity well, it is used in certain types of electrical contacts.The scarcity of gold keeps its price high. Today, slightly more than half of all gold mined comes from South Africa. The world’s richest gold deposits were discovered there in 1886. Gold is also mined in Ghana. It is one of the major export earner in the country.

 

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