Many gold detractors claim that gold is worth what someone else is willing to pay for it.
While most investments generate an income stream that can be measured as a percentage of cost, gold produces no earnings or income.
This entire criticism is faulty but for us to understand it, we need to look at the intrinsic value of other commodities.
Steel can be used to build houses and furniture, grain can be used as food, and oil is turned into energy for a variety of industrial purposes. It’s easy to see the intrinsic value of these things.
These things may be used or consumed but where is the intrinsic value of gold? Or silver?
You can’t eat, drink it, smoke it, or drive it.
Here is one hard truth.
We are several decades removed from the notion of gold being good for nothing else but jewelries or as a doorknob in the king’s castle. Gold is, in fact, one of the most valuable material for some of the most important innovations across industries including health, aerospace, communication, IT, dentistry, and others.
Sure, these innovations are in early stages but that’s precisely why it makes sense to invest in it. Your investment will mature with the technology.
It is used as a cure for cancer, for phones, servers and computers, to produce oxygen in Mars, in cars, and a whole lot of other technological innovations.
Imagine when the use of gold as a cancer treatment has been certified. The demand will skyrocket.
We have been making extensive videos on the industrial uses of gold. Click on the link in the description box or in the upper part of the video.
Gold is also used as a medium of exchange – as a form of money. It may sound weird but think about it for a bit. Anything can be used as money. There’s an emerging barter industry in Facebook that is doing just that. People are exchanging one product for another.
Pull back again. If you trade a horse for potatoes, a horse can die and potatoes can rot. Not something you want to invest in or store your money in.
Almost every item out there expires in one form or another.
Gold and a few other precious metals don’t. It never rots or rusts, it is divisible and combinable, it is homogeneous, and it is scarce.
It should then become apparent that gold has intrinsic value because of its natural properties and the circumstantial geological composition of the Earth.