If ever there was a commodity with a proven track record for being a quality, long-term wealth store whilst the world slides into the deep dark financial abyss – that commodity would most definitely be gold.
On each occasion that the world goes through a financial catastrophe that sends everyone including governments into panic, gold seems to be the only saviour that holds a life line that allows early gold buyers to pull themselves back up. Most of these early buyers (gold bugs) are into the habit of buying gold when prices are low (as it is now) purely to protect their wealth based on the fact that each time there is a financial crisis, prices of gold goes ballistic and they multiply their money – this is the very reason as to why gold is always seen as a safe haven by not only the individual investor, but also by large corporations and governments.
Gold greatest or most fundamental use in human society has almost always been as an instrument to facilitate trade, in other words – money! Even up to this very day, gold is used by governments to offset the deficit in trade from time to time.
Why has gold become so essential to human civilisation? To a point where people risk their lives to obtain it, fight wars and even cheat, steal and rob just to have gold.
Even with all the technology humans have at their disposal, finding gold deposits is becoming incredibly difficult. Up to date, an approximate 160,000 tonnes of gold has been mined from the Earth, all of which could be melted into a 30 feet high cube the size of a tennis court! On average 2,600 tonnes of gold is mined annually, which makes this element rare and therefore valuable in a sense that it attaches to an intrinsic value almost automatically.
Although gold does have industrial uses, it is almost negligible and those currently citing as the reason gold is not moving up the price ladder is because of the demand for industrial gold has fallen is totally untrue and unfounded, because 95% of the planet’s gold is being held as a wealth store in the form of both bullion and jewellery. The fact that demand for gold is not constant, it is growing, whilst supply has been stagnant, which actually means that gold prices should be on the constant rise, but it is not and there are numerous conspiracy theories as to why this is so, one of which (the most popular) points towards the Federal Reserve of the United States.
Based on the chain of events that have taken place over the last decade, it does seem that the Federal Reserve of the United States is holding the smoking gun and guilty of manipulating the prices of precious metals, misreporting, using gold that belongs to other countries without their knowledge and many more.
The fact that the dollar’s value is high now and the prices of gold remaining low, allows the Federal Reserve to store up on gold to address their ‘big stall’ as the American public and foreign countries that have entrusted gold to the US have started asking questions about the whereabouts of their gold.