Reviewing,The,Historical,Value finance, share, loan Reviewing The Historical Value Of The Price Of Gold

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It happened thousands of years ago. Ancient man recognized the worth and rarity of this metal and began to use it as ornamentation and currency. This precious commodity has had a long history since then, forming the basis of economies and money systems for centuries. While the standards have changed today, gold investing has become an integral part of many portfolios. The long history of the price of gold has played an important role in history and continues to do so to this day.Starting From The BeginningAncient man, from Egyptians to Sumerians, recognized the nature of precious metals. While first used as ornamentation, they were soon struck into coins. These coins formed a basis for a system of currency to exchange goods and services rather than using a barter system. As history progressed, coins were replaced by paper money, but the same idea remained. Until the 20th century, paper money could be converted at a more or less fixed rate into the equivalent price of gold. These early standards fixed the price of gold for fair trade.Since paper money could be freely converted into precious metals, the price of gold would only fluctuate slowly and typically only varied a few cents to cover the costs of shipping bullion and insuring the transfer. However, the long era of money convertibility changed with the First World War. With most of the world at war, transferring wealth became increasingly difficult and a fixed exchange rate could not be guaranteed worldwide. The normally stable value of bullion began to fluctuate with varying foreign exchange rates and political alliances.The Old Standard Ends And A New Era Of Gold Investing BeginsThe 20th century and world wars brought an end to the old standard backing paper money. The standard was ended in the United States, United Kingdom, and abroad through the early decades of the 20th century. The market was opened to gold investing as it was decoupled from the needs of paper money. The mining industry boomed with metal production nearly doubling in the 1940s that also saw the price of gold come to $35 an ounce. From there, it began a steady climb upwards as people recognized its positive investing qualities and inherent stability in terms of worth.The 20th Century And Gold InvestingPrecious metals remained a strong investment vehicle as the 20th century moved forward. The overall price maintained an upward. By 1971, the global economy had completely divorced itself of the old standard. Investing remained strong and by 1980, its price hit a record high of $850 an ounce. This dramatic jump was partly due to global tensions over to the Soviet invasion of Afghanistan and the Islamic Revolution in Iran. The inherent stability and underlying worth of this commodity attracted investment from individuals and firms looking to lower their holdings risk and put their money into a safe harbor. As a result, that safe harbor yielded tremendous returns.The meteoric rise eventually cooled off with values coming back down, but still high as compared to before the peak. At this point, investors incorporated these types of assets more readily and not just as a reaction to crisis. Overall, it remained an attractive and effective option for building and maintaining wealth. For example, with an economic bubble and the bond market crash in the 80s, investors who stuck with precious metals saw another payoff that offset the tough economy.Gold Investing In Today’s EconomyThe overall value did well on and off through the end of the 20th century. In the 90s, as a massive bull market was in full swing, the steady values looked like a loss as compared to the skyrocketing equities market. However, tough markets, recessions, and bubbles in 2001 and 2007 wreaked havoc on many portfolios. Not surprising, precious metals held the ground for many investors and was one of the few big winners of the time. With the latest recession in particular, the price of gold set new records, shattered the $1000 per ounce mark, and continued to grow. The underlying, inherent value of this asset remains its strong point. While being classified as conservative, investors saw its ability to generate large returns while equities and real estate plummeted. Even with the recovery slowly coming to fruition, precious metals are still growing, reflecting the overall belief that they are a strong investment. If past performance is any indication of the future, portfolios with precious metals will continue to perform well.