Why is Gold considered so valuable?
This entry was posted on July 19, 2018.
When you ask people to think of something as being valuable, they will often mention diamonds or gold. For centuries the noble classes have used gold as a way to show their wealth and status. It has been used as a currency to trade and grow wealth. And of course, it has been used in jewelry.
But why is gold considered so valuable?
The two main reasons that cultures around the world value gold for jewelry are:
1) It is malleable, meaning it can be changed in shape and structure
2) It is durable, meaning it doesn’t deteriorate or tarnish easily over time
Another reason is that it is rare. Gold is really hard to come by because you can't just gold in your own backyard. Many cultures are still mining gold, so the global volume of gold is increasing, but only very slowly. It is not available without some effort to find it, mine for it, and work with it. This is what makes it a precious metal.
Rarity also lets gold work well as a currency. Currencies only function well if they have a relatively stable 'volume' (in economic terms ‘volume’ means the total amount in circulation). Because Gold is rare and also expensive to produce, the base price is high.
As there is a high demand for gold, meaning lots of people are trying to buy it, they will have to compete with each other for the gold and that will keep the prices up.
How Karats make gold more valuable
As with other gold colors, the higher the karat amount, the higher the actual gold content. This increases the value as there is more gold in the item, but it also makes it less durable as well.
- 24 Karat Gold is known as pure gold. However, due to softness, it is almost never used in jewelry.
- 21 Karat Gold is an extremely rare type, with 21/24ths of it being 100% pure gold. This works out to be about 87% gold, and the other 13% being an alloy with copper.
- 18 Karat Gold is most common for expensive jewelry, as it has a relatively high gold content (about 75%) while being much stronger than 24K or 21K.
- 14 Karat Gold is popular because of its affordability, and it approximately 58% gold,
- 10 Karat Gold is the lowest gold allowed content in the United States, which works out to be less than 42% gold.
The value lasts a lifetime
Perhaps one of the biggest factors in what makes gold more valuable is that it lasts a long time and is treasured by the wearer for many years. This is why purchasing a piece of gold jewelry for a loved one is an important tradition.
There is no correct way to assess the personal value of a jewelry piece to a person. It depends on when they received it, who gave it to them, and the personal meaning that they have for it.
Choosing a piece of jewelry for a loved one adds the value of the relationship to the piece.
This is why even though a piece of jewelry may be worth only a few hundred dollars, it is irreplaceable for the owner.