That's why.
I’ve never understood why anyone buys gold.
If you read this book on the history of gold you will understand that the current situation is anomaly. “The Power of Gold: The History of an Obsession”.
A return to a gold or silver standard is brewing. The world has been off the gold standard for only 60 years or so and is probably reverting to the historical norm.
http://www.amazon.com/Power-Gold-History-Obsession/dp/0471003786
I can’t speak for the others; they can speak for themselves.
But precious metals are a store of value/wealth throughout history, that cannot simply be randomly produced out of thin air. For this reason, nearly all nations (at least modern ones) hold at least some gold/silver.
There is no counterparty risk to gold or silver that you own outright and have in your possession. Paper currency carries counterparty risk in so much as it’s only worth the finances of the gov’t that issues it. (See Zimbabwe, Weimar Republic)
They are rare. Rare enough to ensure passage to freedom (as happened during Hitler’s rule) and rare enough to confiscate (such as FDR did here, or the Ukraine gov’t did before they starved their population).
Me neither. Folks should just trust the Government to do the right thing with paper currency.
Thousands of years of human history clearly show that when nations abandon the imposition of some arbitrary metallic standard, their economies flourish and their societies blossom.
Only the Government can deliver more flexible cash, suited to the situation.
Just stop thinking, and listen to those who know best - Government experts.
“I’ve never understood why anyone buys gold.”
I can understand why someone would buy gold. What I can’t understand is why someone would buy a PIECE OF PAPER that claims to represent gold!
That's why.
You better hope you do not find out the hard way why people buy gold.
The Swiss are wise, they have an old adage that says “Always have some gold in your possession and hope you never have to use it.”.
I read about the collapse of a currency a few weeks ago.
Not a fancy government account, but an on the ground citizen account of what was life like for a year after.
The tip I took away from it:
1. Have jeweler’s gold/gold jewelery. All gold was exchanged at the lower jeweler’s gold prices, even if it was “gold coins.”
2. Don’t discount the value of precious stones like diamonds, etc. either.
3. If you are trading at the exchanges, remove the precious stones from you pieces before taking the gold to the exchange. You’ll fetch a better price for the stones later. If you are taking great grandma’s ring to exchange it...you won’t be getting it back later.