Why Is Gold So Expensive?

it's been called the tears of the sun it's been used in everything from important ancient offerings to the gods to king's tombs to your grandpa's crown filling that's right it's gold and the word alone carries weight gold has been highly valued since the very beginning of civilization but why exactly is that how can a shiny rock that can fit in the palm of your hand be worth the same as a car today we're going to answer that question we'll talk about the history of gold how it became valued how rare it really is and if the value is going to last further into the modern age gold has maintained a high value for thousands and thousands of years six thousand years ago in 4000 bc gold was already being used in artifacts in egypt where some kings wrote that gold was as common to find as dirt 5000 years ago in mesopotamia gold was first used in jewelry in 1091 bc small squares of gold called yin yan were used as currency which was followed by the ancient persians and ancient greeks using gold coins at the time many greek philosophers like plato and aristotle believed that gold was a dense combination of two things water and sunlight and though their observation about gold showing up in running water was pretty spot on their science was a bit off scientists believe that all the gold on earth originated from the explosion of a collapsing star yes that's right the shiny ring on your finger and that gold tooth in your grandpa's mouth were created as the result of a supernova billions of years ago gold particles were mixed into the cosmic cloud that formed the earth but that gold sank to the center of our planet near the core over time the gold peppered its way throughout the earth and has been brought closer to the surface and deposited in veins by warming and cooling water as a result of shifting fault lines some of those veins surface via erosion and water carries small golden nuggets from those veins downstream which explains why gold is often found in moving streams like for example the gold flakes found in the american river in 1848 by john sutter an event that kick-started the gold rush which brought around 300 000 people to the well golden state resulting in 81 million dollars worth of gold being mined in less than a 10-year period a couple decades later in 1990 the gold standard act was passed which made gold an asset that was backed by paper money and just a couple of decades later franklin d roosevelt made it illegal for u.s citizens to own more than a small amount of gold in the form of coins or certificates citizens were strongly compelled to sell their gold for a rate of 20.67 cents per troy ounce to the u.s treasury and that gold was then stored in fort knox in kentucky in 1975 the golden window was closed which ended the fixed exchange rate between gold and paper currency as well as the rules regarding private ownership of gold so yes gold has been through quite a lot over the past 7 000 years but one important thing has remained the same gold has always been valued but why gold mainly because well we say it is but we say it is for a darn good reason firstly when it came to finding something of value prior to traditional currency civilizations had several options there are 118 elements known to man but of those only a few are viable options to be used as a commodity all of the gases obviously are out of the question scary radioactive elements like uranium and plutonium wouldn't be particularly easy to toss in your pocket and use at the local bazaar although if we had gone that route we probably would have had a pretty interesting zombie apocalypse by now then there are the more reasonable familiar elements like iron silver copper and titanium but surprisingly all of these have less than desirable characteristics aluminum while great for wrapping leftover pizza is much too flimsy to be used in coins or artifacts and on the other end of the spectrum titanium is far too hard to utilize it can only be smelted at 1 000 degrees celsius and people in ancient mesopotamia didn't have the technology to make that happen iron and lead while both plentiful and easy to manipulate wouldn't be as useful as currency because well they rust and there is far too much of it available abundance is an issue when it comes to value if everyone had an acre of gold in their front yard that gold would be about as valuable as the weeds growing alongside of it on the other end of the spectrum impossibly rare and scarce metals like platinum are also a problem because they aren't found widely enough to be used as a currency between cultures and communities so that brings us to silver and gold both are just scarce enough to be considered valuable but not so scarce that obtaining them would have been impossible plus they are both malleable which allowed early civilizations to hold the precious metals into whatever their hearts desires even if their hearts desired things like this and though gold is malleable it's pretty much indestructible that means gold that was used by mesopotamians still exists today in the gold we're mining today will be around for generations another reason gold is so valuable sounds a bit less profound but in reality it is just as tied to science that reason is humans like shiny things we like glitter we like pizzazz we like chandeliers hanging from the ceilings of our mansions and we love shiny shiny gold scientists believe that our attraction to shiny things can be linked to our biological attraction to water so next time someone gives you the side eye for buying a new watch or a glossy new car tell them you can't help it it's all in your dna baby so there are four of the reasons why gold is so valuable number one it's scarce two it was easy for our ancestors to utilize number three it's terrible and number four it's shiny and we like that but there's one part that we need to dive into just a little bit deeper the scarcity of gold when we live in a society where you can get gold flakes in your mixed drinks at a casino in vegas how scarce can it really be the answer is a bit surprising and a bit more complicated than you may expect currently if you took the world's gold stock and melded it down it would form a cube measuring about 68 feet on each side for reference that beautiful solid gold cube would easily fit inside of a baseball infield so in other words it's not a lot 47 percent of the world's gold is in the form of jewelry 39 is used in things like coins and bars and the remaining percentage falls into the other category that includes the gold used in technology building materials and dental work but our supply of gold steadily grows at an estimated two percent per year and even then there are millions of tons of gold that we haven't figured out how to access yet it's estimated that there are at least 20 million tons of gold in our world's oceans not pounds tons and not thousands millions forbes estimated that the amount of gold found in our oceans is likely equal to about 771 trillion dollars and those scientists and people itching to make a quick buck have tried to figure out a way to reach that precious gold they haven't quite figured it out just yet and many believe that they never will several veins are miles underneath the water and recovering the gold within them using mining would be quite an overwhelming task that brings us to the next question what does the future of gold look like across the board you'll find several experts arguing over the future of gold but if the past is any example it seems as though gold's value is safe even though the value of gold can fluctuate negatively short term long term it maintains its value and it always has as investment manager gary brinson said an ounce of gold bought a fine man's suit in the time of shakespeare and so it does today if gold's past 7 000 years of value is any indication of its future it looks as though we could be buying suits on mars or the moon with just an ounce of gold so there you have it the history of gold the reason it's valuable and its probable future what do you guys think is gold really deserving of having such a high value and do you have any let me know in the comment section down below if you enjoyed the video make sure to leave a like and subscribe and as always i'm mr luxury pip pip to doodly do

Channel: Mr. Luxury

Views: 39,050

Keywords: why is gold so valuable, why is gold so expensive, how is gold made, why is gold valuable, what makes gold valuable, gold expensive, what is gold, why is gold so important, why gold is important, the importance of gold, gold currency, price of gold, gold, gold value, value of gold, what is money, how is money created, how is money made, why is gold expensive, the real cost of gold, the true cost of gold, expensive, mr luxury, gold price

Id: GeY2zRm5_uE

Length: 9min 7sec (547 seconds)

Published: Fri Feb 26 2021