The Internet remains glutted with blogs crying foul and screaming the sky is falling with respect to gold, but in truth, gold will always hold value.
Will Gold Ever Be Worthless? (ANSWER EXPLAINED)
All investments will fluctuate throughout time, but gold’s many uses support the conclusion that it will always hold value.
While gold prices rose this morning, they could fall tonight, only to re-surge in the morning.
Since gold’s uses vary, supply and demand severely affect its price on a day-to-day basis.
As cryptocurrency popularized, investors began comparing its runaway growth to other investments, erroneously expecting every stock, mineral, gemstone, and bond to do the same.
That isn’t a realistic expectation.
Gold’s Many Uses
If you asked the typical investor why gold holds value, they would likely tell you because everyone makes jewelry of it, or it functions as a backer for fiat currency.
The typical investor isn’t that savvy.
Most of the US’s investors, 52 percent of the 55 percent of the populace that invests, rely on their work-related investment account (401K usually) for their investments.
Only 14 percent of US citizens own individual stocks.
That leaves a lot of individuals with no overarching need to research investments.
The savvy investor who belongs to that 14 percent knows that due to the bevy of uses of gold and the mining required to acquire it, its value fluctuates wildly.
Industry can’t buy it if their suppliers don’t have it.
It loses value at those times when there’s none available or when the market becomes glutted.
Both scenarios drop the price because the former requires businesses to innovate and design an alternative to gold.
The latter drops the price because when you have a lot of something, you remove its rarity.
The balance between those two results in just enough gold making it to market to keep the price strong.
For example, in the jewelry business, designers wanted a cheaper, more readily alternative to gold.
They invested in research and design (R&D) and their resulting product now proliferates many jewelry stores.
While some methods of gold plating have existed since about 600 BC, modern science perfected the process, and its main use is for gold plating jewelry.
Later, the jewelry industry also invested in R&D to develop faux diamonds called cubic zirconia, but that’s another article.
When none exists or so little exists that its price becomes exorbitant, the industry must innovate.
This precious metal appears in jewelry and ornaments, typically blended with a harder metal such as silver or copper.
In the manufacture of housewares, gold provides a coloring agent in the process of creating cranberry glass.
The glass’ deep, vivid red comes from gold.
In electronics, gold contributes corrosion resistance to electrical connectors used in most electrical devices, most notably, computers and smartphones, which contain about 50 milligrams.
The metal coats audio cables, USB cords, video cables, and gets used in electrical contacts, such as switch contacts.
The wires connecting semiconductors use gold.
Gold contributes the reflective layer to high-end compact disks.
In medicine, tooth restorations use gold alloys for crowns and dental bridges.
Medical research uses suspensions of gold nanoparticles, also called colloidal gold, and in the process of immunogold staining, also known as immunogold labelling.
Nuclear medicine uses the gold-198 isotope in treating some forms of cancer.
This isotope has a half-life of 2.7 days.
Not to be outdone by medicine, chemistry also uses gold.
In chemistry, the precious metal provides a heterogeneous catalyst or gets dispersed into nanoparticles to boost the effective surface area.
In photography, gold provides a color-shifting agent used in the creation of silver bromide prints.
It contributes to the brown or blue tones.
Gold can reflect electromagnetic radiation, even that which falls outside of the visible spectrum.
For this property, satellite manufacturers use the metal, coating their satellites with it.
Continuing Usefulness of Gold
As you can see by the list of uses, gold has never become useless.
In fact, its usefulness has continued to grow.
Nuclear medicine has only existed since 1967 and was only recognized as a field in 1971.
That means that in the last 50 years, scientists discovered a new use for gold. Its use in satellites, computers, smartphones, chemistry, and other electronics, including cabling, also developed in the past 50 years.
The continuing development of the usefulness of gold sees no end.
A thing can only lose value when it ceases to have a use.
That seems far, far in the future for gold.
Some people worry that gold will run out.
In a way, it will.
According to Provident Metals, mining for gold could reach an economic unsustainable point by 2050, although discoveries of new veins of gold will likely result in mining operations continuing until 2075.
At that point though, we will simply turn our resources to recycling the existing gold.
We’ve already begun that process.
Smartphones, for example, have a very short lifespan, but we already recycle them.
Stepping up these efforts now can help us begin replenishing our gold stores to make the gold in the ground last longer.
We recommend that you also learn about a material similar to gold called montbrayite.
Will Gold Ever Be Worthless?
Gold will never become worthless.
We require it for too many things for it to lose its luster as a raw material and an investment.
Its inherent value as a raw material provides the reason, we use it to back our fiat currency in many countries, as the US did for a long time.
Like other investments, gold continues to fluctuate.
This precious metal spikes and falls in sales value each day. Investing in the market, any market provides inherent volatility.
You could invest in this precious metal by purchasing it in bars.
Scarcity adds value and since you know that mined sources will taper production by 2050 and likely deplete resources by 2075, you can count on this metal to increase in value.
The smart move is to buy it and hold onto it.
As a long-term investment, gold makes sense.
Efforts to develop a substitute never took on.
Today, purchasing something gold-plated doesn’t hold the cachet it does to own something made of gold.
You can depend on the original precious metal to hold its long-term value.