why does gold have so much value now that it’s not propping any currencies?
In: Economics
Gold arguably had less value when it was propping up currencies, because every currency had a fixed price for gold. That’s how it actually backed the currency, by always exchanging at the same weight of gold per currency unit. This meant that it was impossible for gold’s price to rise.
There is a finite amount in the world that we know of. I think I read somewhere that we only have enough gold to fill one Olympic size pool basically. So that makes it valuable. Also it is pretty.
It is not so much that gold’s calue is going up, but rather currencies are becoming less valuable over time due to inflation. As governments increase the amount of their currency in circulation, it devalues it. But since gold is a scarce resource that is universally considered to be money, it gains value compared to these devaluing currencies.
Outside of that basic concept, it also does have industrial uses, namely being a conductor in computer chips, that also puts buying pressure on it as well, thus contributing to its value increase over time.
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