Have you ever wondered why gold is so popular? For most men it’s just a metal that’s shiny and yellow and thus it’s value isn’t fully understood. For women it’s because of its shininess and its popularity with other women. But for gold investors it takes on a much different meaning, and that meaning goes back far into history.

by Giorgio Montefiori via Flickr

Gold has almost always been popular. There have been some civilizations where gold was the standard because, for them, it was abundant. Indeed, one only has to look back at many South American cultures that were wiped out to know why Europeans literally salivated, then killed, to get it.

That’s because in other civilizations gold wasn’t as prevalent. Back in the B.C. days gold was only available for the richest citizens. Pharoahs were buried with much of their gold, and their sarcophaguses were either made totally of gold or has much of it designed in gold. Before then, the shinier the raw metal, the more value it was given, and gold was not only shiny, it was considered more rare than any other natural metal long term.

Even though gold is still mined, production has fallen over the years as many mines dry up. There are supposedly great deposits in the oceans, but to date there’s no technology available to get to it. Thus, one of the big reasons gold holds its value is because, for now, there can only be so much of it. When the world was smaller the value of gold would drop as production grew, but we’ve reached the point where the value of gold only drops so much, and instead its value can increase dramatically in times when the economy might be weak otherwise.

The thing that makes gold so popular is that it’s a pure metal that’s also pliable. It’s easy enough to melt and weigh and thus can be made into almost anything. Although you won’t see a lot of them there are gold cars, gold phones, even gold iPads. Most of the time you’ll see gold plated watches or other jewelry, whose value is still pretty high, but if you see solid gold… that becomes the difference between a watch that goes for $500 and a watch that goes for $25,000 or more.

Because gold is measured in karats, which is used for precious metals (as opposed to carats, which is the standard to use for precious stones), it’s easy to create bundles of gold into specific and measurable shapes so that you’ll always know how much they’re worth, or it can easily be calculated, since a gold coin worth a dollar today might be worth $5 tomorrow. The two most popular ways of doing it are either creating gold coins or gold bars. Most gold coins are purchased by collectors, while gold bars are in the reserves of most countries.

There is one other thing about gold, that being its measurement by age. If you melt down gold it’ll retain its normal price of the day. However, gold coins that have historical perspective are worth even more because they highlight periods of time where something rare occurred. One gold coin from the 1930’s was sold for more than $7.5 million, but other gold coins can go for thousands, or millions, as well, which is why there’s a robust industry in trading and buying gold coins.

Think of it this way; even if all the oil in the world suddenly dries up, gold will still be there in all its valuable glory.

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