why does gold have so much value now that it’s not propping any currencies?
In: Economics
Gold has value because it’s an excellent store of value, and being a good store of value is one of the important characteristics of money, hence why gold was used as money a lot historically.
Gold is a good store or value not because it’s shiny, or because it’s used in electronics or jewellery, but because it’s scarce.
If a society adopts a new form of money e.g copper then demand for copper increases. This incentivises new copper miners to begin working which increases the supply of copper and depresses the price. Thereby eroding the wealth of those who store their wealth in copper.
Because gold is the scarcest inert metal it was chosen by savers because they could be confident that there wouldn’t be a substancial increase in the gold supply which would reduce gold prices
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