Essay, Pages 4 (830 words)
There are very few things that bring up the thoughts of affluence and wealth. However, gold is different. When producers release films dealing with precious metal scandals, they always deal with that of gold. There are very common phrases in advertisements, like “good as gold” and “going for the gold” (Mladjenovic, 2008). Everything precious is equated to gold. The religious faithful believe the streets of heaven are made of gold. This includes even the plants that adorn heaven. When one has a golden ring or any jewelry, he or she is a target of many, including robbers.
This paper seeks to discuss gold as far as investment is concerned. Background The precious metal Gold is found as a periodic element in the standard periodic table. The symbol used to identify it is AU, and it has an atomic number of 79. It is rated as one of the most ductile and malleable metals in the world. Experts state that one ounce of gold can be stretched into three hundred square feet.
It is a good electricity and heat conductor, and is fully resistant to corrosion and rust. Additionally, it is a very good material to fashion into money, jewelry and coins.
At one point in countries’ economies, currencies lose their value. The yen, dollar and euro may lose value, but that of gold remains intact. These rare qualities make it a very valuable metal, and therefore people are always interested in investing in it as it has many benefits (Mladjenovic, 2008). Gold is responsible for many historic building constructions.
This is through the money that is gotten from people investing in it. It is behind the destruction of very rich empires such as the Aztecs. Gold has a place in all portfolios as it has a characteristic of the inflation hedge.
Any time the price of gold fluctuates; there is always a tendency of it trading at different prices compared to the other assets. It is totally a liquid asset which increases or retains its value in times of economic or political turmoil (Light, Greene, Blanchard, Steinberg & Edwards). History of Gold Investment Gold was rated as the ancient precious metal of kings from the days of civilization. It was a unit of exchange and the essence of money. It had all the characteristics which qualified it as money. It was not easy to get gold in those days, as it is still the case today.
It was exchanged and carried easily, and was considered as the global monetary form which dissected all cultures and nationalities. Even after the onset of paper money, gold did not lose its popularity as the best currency. The use of paper currencies started in the early Mesopotamian days. The paper money could not reach the gold’s intrinsic value. The advantage of the paper money was that it was easy to carry. In 1930, there was a period of Great Depression in the world. At this time, stock prices fell. However, the prices of gold were never affected, they were still strong.
It proved its rare quality, which is “gold shines brightest during periods of inflation” Mladjenovic, 2008). The reason why gold is perceived as scarce is because of its worth. The Central banks in the world have set a pace in stockpiling gold. The conglomerates in mining have come up with inventive ways of finding it. Between 1848 and 1852, there was a large gold rush in California. It is the largest that has ever occurred in history. It was characterized by a westward migration of over three hundred thousand people who all had the ambition of becoming rich.
This gold rush is rated as important as far as investing in gold is concerned. This is because it is used as the benchmark of measuring all discoveries in gold. Since this period, there has always been a renewed interest in investing in gold. The California gold rush led to the rise of the South African, Canada, Europe and Australian gold rush (Lankow, 2009). The largest nugget of gold that was ever found was discovered by Richard Oates and John Deason in 1896, during the Australian gold rush. The nugget was referred to as welcome stranger. It had a total of seventy one kilograms and was sold at nine thousand, three hundred US dollars.
After the gold rush in South Africa which took place in 1896, over forty of all the gold that is mined in the world was gotten from Witwatersrand basin. In 2002, the National Geographic Article stated that a third of the un-mined gold resources in the world remain at this place (Lankow, 2009). There was a rare collector coin in 2002, which was sold for $7. 6 million. The last type of such kind of a coin was discovered in 1933, which was referred to as the double eagle. This rare coin was taken by the loyalty of Egypt, and later was found in New York after several years (Lankow, 2009).