Historically, gold has been in great demand all over the world. It is held in reserves by governments. People own gold as a form of investment. Wearing of gold as in jewelry exudes wealth and luxury in some cultures. It is a status symbol as well. Apart from jewelry crafted from gold or plated with gold, Gold bars and gold coins are favorite investment as well as collectible items.
Gold is not the only precious metal that is available for purchase, either for investment or as a wearable accessory. Silver and platinum are popular metals that have been used in the making of jewelry and collectibles. In the past, gold, silver and copper could be found in the making of housewares such as mugs, bowls, cutlery and cooking utensils. However, gold has always had the prestige and glamor that silver does not seem to acquire in the public consciousness. Gold is used as the premier material in art pieces that fill palaces and museums. Ancient buildings of the nobility and the wealthy were fitted with gold furnishings. Why does gold have such an alluring presence?
Since time immemorial, gold has come to represent something that is rare and difficult to obtain. In the olden days, a person is measured by his weight in gold. Moreover, gold does glisten in the light thereby giving it a glittering appeal. It looks great as jewelry. Compared to gold, silver does not have such visual appeal. As metals and not as objects of desires, both gold and silver have properties that make them valuable for industrial applications. In this context, silver outperforms gold in popularity. Half of the silver production is used industrially while only ten percent of gold is used. Much of the demand for gold is for the making of jewelry.
The value of gold has risen by leaps and bounds in the last ten years. It reached the highest level shortly after the 2008 recession and the price of gold has remained above $1,000 per ounce despite having dropped from its heights. There is speculation that the demand for gold can only increase with the rising incomes and growth of the middle class in large emerging markets such as China and India, where gold is regarded as a must-have. Furthermore, with the rise of the middle class and more savvy investment knowledge and advice, the consumers in China and India will treat gold as a long term investment that can withstand even the most trying climates. In countries with currency restrictions, owning gold is a good alternative as they can be used for barter trade in the worst of circumstances.
As for silver, its price has also risen in tandem with the price of gold. Silver was heavily traded and reached its highest in the last ten years shortly after the 2008 recession. Like gold, silver stagnated in the 1980s and 1990s. Where it will go from here is anyone\’s guess. If it tracks the path of gold, and if the demand for gold continues to increase, perhaps silver too will be a worthwhile investment.