Kamis, 26 Mei 2011

Why Gold Is Expensive and Continues to Increase In Price

Whether you inherit them from your great grandmother or purchased one from a gold collection in Beverly Hills, gold jewelry and other precious stones seems to bring with them not just beauty, but also a feeling of power and luxury. Gold and other gems are very expensive. The less expensive ones are either a mixture of precious metal along with common ones or some are just complete replicas. It costs a lot to buy gold jewelry, and maybe a life's fortune to buy a significant quantity of gold bars.

Gold is traded in bars, and for commercial use, they are made into coins, jewelry, or smaller bars. Generally, gold tends to be quite soft in its pure form. Thus, other metals are combined with it for strength and durability. But with this in mind, gold still tends to be very expensive.

Mining gold and any other precious metal involves a lot of engineering, science, and research long before that piece of jewelry lands in your hands. While there are places all over the world that has been identified to have gold buried deep in their mountains, research is constantly being done on how to mine the area while keeping up with environmental laws. A lot of engineers constantly work together as well to identify the density of gold or metal constant in an area.

Getting miners or manpower also entails a lot of operational cost. Despite what is being portrayed, shipping the metals and having them insured is also a part of a gold mine's operation. The government and legal compliance will take a huge amount of resources – including time and financial backup. Chemicals are being used to extract them from the mines and this entails costs as well.

Finding gold will take a lot of time. Extracting gold will take an even longer time. Mining companies spend months and up to years mining to finally trading gold. Gold has always been known to have high monetary value. Apart from the rarity, the beauty and purity of gold is taken into consideration when pricing them. Especially colored gems such as blue diamond or pure red rubies, these gems are very rare, thus, ownership and even viewing them is limited to just a select few.

Inflation is another factor that increases the value of gold. Unlike paper money, gold cannot be printed at will. Thus, due to the laws of supply and demand, gold will increase in value versus paper currencies over the course of time. Gold, platinum, and other precious metals, since they are limited in supply, are in essence "real money". There will always be additional demand for gold as well for jewelry, weddings, and other gifts.

There is a constant struggle in the world even during ancient times for the ownership of gold. Gold will always mean money, power and status, three things that seems to be what people always want for themselves. Whether for personal use, for investment, or as a means of livelihood, gold and other precious metals will always be the standard for financial success and power. Even in the years to come, gold will be a treasure everyone will want to have.

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