Originally posted on 09/22/2020:
Its store of value is the principal utility today - it started because of its scarcity and value in jewelry making.
Here's a quick demonstration of how gold stores value:
In ancient Rome, an ounce of gold could get a man a fine hand tailored suit. (Toga or whatever constituted a suit - but it could) ...
In 1935, an ounce of gold might trade for $35 in paper money. Also, in 1935 $35 could buy you a fine hand tailored suit.
NOW ... let's say in 1935 you left that ounce of gold and $35 in cash in a drawer - and then opened the drawer in 2020.
Your ounce of gold could trade for @ $1900 and buy you a beautiful suit, but that $35 in fiat could only get one dry cleaned.
- hope you get the drift with that story, but my personal feeling is gold is that perpetual store of value rather than an investment per se. I suppose people could invest in gold for relative value, but personally I think the right time to buy gold is when you've already made your money and want to preserve it with minimal risk.