However, the lustrous and metallic qualities of gold, its relative scarcity and the difficulty of extraction have only increased the perception of gold as a valuable asset. Gold is much more valuable than any other metal, which means it will always have a use for it. Metal is so popular because it doesn't rust or tarnish and its color never fades. That's why gold is likely to remain valuable, no matter what happens in the market.
Pure gold is too soft to be a metal, so much so that people used to bite into coins to check for gold. Human tooth enamel has a Mohs hardness of 5, while gold has only 2.5, so teeth can make a dent in a piece of gold, but not a gold-plated coin. That's why gold has been used as a currency throughout history, it doesn't break down with everyday use. This shows that gold can be a useful component of a portfolio, even if it's a scary asset class to hold on its own.
Other forms of gold, such as ETFs and futures contracts, may be less valuable in times of economic crisis. While most investors, including myself, have moved away from gold because of its history of high risk and low rewards, there are arguments in favor of owning gold because of its ability to add value at the portfolio level. In fact, it is recommended that individual investors keep between 5% and 15% of their gold assets as a hedge. Some of you will see gold as an old-fashioned tool for crazy conspiracy theorists who own a lot of weapons and canned goods.
When aluminum was first discovered in the late 18th century, it was initially more valuable than gold because of how difficult it was to obtain it. In other words, when you have gold you're communicating all the things you're capable of (dominating supply routes, commanding an army, making scientific efforts, gathering manpower, etc.) While gold doesn't attract the attention of other assets, such as cryptocurrencies or meme stocks, it's still extremely valuable for several reasons. The undeniable truth is that the value of gold will never be destroyed, central banks cannot inflate it, and governments cannot devalue it. In recent years, there has been an increase in the number of people who invest in gold because they are concerned about the value of the FIAT currency, such as the U.
Nowadays, although its properties have not changed and there is more gold than ever, it is simply too restrictive; economies are fast and dynamic, with enormous results and impressive technical possibilities. In addition, gold has much higher volatility, with much lower returns than many other asset classes with similar risks (i). This explains why more than 80% of the world's annual demand for gold goes to jewelry and investments and not to industrial use. For example, you can buy physical gold, buy gold shares in gold mines, or even buy shares in an ETF (exchange-traded fund) that tracks the price of gold.