It is one of the great investments has been ever existed to human. Even Robert Kiyosaki, author of Rich dad poor dad book agrees with it. Now, countries as their leaders who leads country who have to look out for future of country still believe that gold is great and don’t want something else, where palladium and platinum are expensive than gold, it is safest investment in world. And silver is second, even after being way cheaper than other precious metals.

Why gold over other precious metals?

The reason behind this is their liquidation. They can be liquidated at any place of world at any moment at market value. And that price is global. Globalization happened after World War II and prices went global as nobody would accept lower price than it and no discounts. No matter if there is war going on or what dealers will have same price as global price. It is one of those reasons why they are highly liquid assets.

Even in past, gold was used in stuffs to make them expensive and as currency. Gold was used for as higher priced coin and then silver for lower. Back then, nobody taught them to use gold and silver. And in modern world, where people have become even more sophisticated and found better precious metals and expensive than them, but they still use gold and silver.

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Gold has an impressive history.

Oldest golden artifacts in world (4600-4200 BC) from Vama necropolis, Bulgaria. Gold was valued most expensive even in past as it was one the greatest investments in have. As people used to invest in gold as having gold utensils and jewelry. Back then, they even found stones like ruby and emerald, and they still used gold as base. Top prize at the Olympic games and many other competitions is the gold medal.

Gold played major role in developing civilizations

Gold played a major role in developing civilizations and countries. As which civilization in past had more gold, they were at top and seen as they have most resources. Nobody wanted to challenge them. Gold played major roles in western culture as a cause for desire and of corruption. Beginning in the early modern period, European exploration and colonization of West Africa was driven in large part by reports of gold deposits in the region, which was eventually referred to by Europeans as the “Gold Coast”. They used to loot other nations and continents for valuable minerals. Even in early moder period, they believed that having more gold will show in world as they have more resources.

How much gold was mined

Gold was mined in great extend in past. 30 tonnes a year from 600 to 300 BC. Roman miners reaching a peak production of 200 tonnes per year, an estimated silver stock of 10,000 tonnes circulated in the Roman economy. Before industrial revolution, the world production of silver was around a meagre 50 tonnes per year. During industrial age, mining of valuable minerals began at very heavy extend, and we found oil, the most importance resource of century, as it has helped a lot in leading industrial age. Oil provided cheaper and efficient energy and has helped in mining activities. Lot of gold was mined.

Why we did that

For example, you might know research done by scientists in lab on mice. They starved mice. Didn’t give them food for days and when they gave them food, that was not in a limited content, they could eat as much as they want. And it was seen as because mice were starved for so long, they had phycological changes and affected their brain. They couldn’t stop eating, they continued eating eve after they were full. They became fat and weight was significantly increases.

It is what happened to us in industrial age. We had to travel, fight in wars and win, spend so many resources to have valuable commodities and then bring them safely from pirates to home nation. We were starved for resources and when we found that we can mine it so efficiently from our own countries, we did it. We did not stop and mined as much as 75% of the presently accounted gold has been extracted since 1910, two-thirds since 1950. That is lot of gold.

What Robert Kiyosaki has to say

As Robert Kiyosaki says, an Asian old woman told him when he was buying gold in Asia, gold and silver are tears of God. And they have been on earth and will be. They are most important investment in world. It’s God’s money and nothing can replace it. And till this day, he invests in gold and silver. He even has gold and silver mines which helped him generated millions of dollars. He believes that they are one of the greatest assets to have.

How USD became global currency because of gold

Gold is so much so important that America used it to make USD become international currency. It was backed by gold on which us dollar rose. Back then, no nation wanted to take risk by using USD as currency for trade. US government made a way to make everyone use USD for trade, as they would use USD and for security, USD will be backed by gold.

An ounce of gold for $35 and nations agreed to it. US government discontinued gold s currency in 1971 in US. And for silver, did it back in 1963. Some people thought it was just another bill passed by government. But sadly, it was not. It was one of the greatest moves by government. They now had more control over economy than ever before.

Because now they can print money, they can destroy money and control where it goes and who’s able to use it. They can help economy by printing more money. They print money out of thin air as nothing is backed by it. they were used to use gold as currency in US and to increase gold in economy to help economy grow, then they would have to put lot of work to get it done.

As gold has to be mined from Earth which costs money. So now you see gold currency can not be made out of thin air. And this move in 1971 has made other nations to stop trusting US as USD was not backed by gold anymore. They can not redeem USD to gold anymore.

How USD went down in 1971

Because USD was backed by gold, it is why it became international currency for trade. After 1971, value of USD went down. And they stopped using it as currency in international trade. Then US government set a meeting with other nation and made an agreement as they will use USD for international trade and us government won’t print so much USD to keep demand high so that value of USD goes up. As other nations will have USD reserve so that their investment grows.

But they have seen to breaching that contract as they have been printing lot of money and this has made USD value to go down. As you can see in graph, in 2022, they introduced $7 trillion in economy, and this has made USD value to go down. Then in 2022, they began to burn USD in indirect way, so this caused lower the supply of USD and value of USD went up. It was all time high in 20 years. Read more here.

Some say that gold is not great investment

Now it will be clear that gold is great investment to have. There’s something that you have to know, some say that gold is not great investment. Just because price can be changed for short then it doesn’t mean that it is bad investment. Stock price can be changed withing same circumstances.

How to invest in gold

For investing in gold, you should always buy 99.99% pure gold. If you buy any less than that, for example jewelry then that gold will not be pure. It will have impurities and you will have to pay artisan to remove them to get pure gold when you try to sell that jewelry. And you have to find safe place to keep that gold. It can be vulnerable to theft.

How gold can affect your goals

There is advantage for investing in gold. It can be a deal breaker for you as it might not suit your goal and you will forget idea to invest in gold for a while. Gold can not generate passive income for you. It can affect your goal. Real estate will generate passive income and you don’t even have to work for generating that income. However, you buy gold and sell it. Longer you hold that gold, more gains you get when you sell it. You do not get any compounded interest for holding gold.