Gold is more than just another commodity, it’s a currency. It is THE currency that evolved in the marketplace over the last 5,000 years.
Gold was the main currency in most of Europe, Asia and the Americas for most of the last few thousand years, up until 1971 and the end of the Bretton Woods Accord.. Silver was also widely used, though to a lesser extent.
Gold evolved independently as money in the world’s main civilizations, because it is:
1. Rare - About 5 parts per billion of the earth’s crust. Difficult and expensive to mine.
2. Indestructible - It does not tarnish or decay.
3. Compact - If all the gold ever mined were made into a solid block whose base was the size of a football field, then it would be about 1.5 meters (5 feet) high.
4. Malleable and divisible - You can easily reshape it, flatten it, and divide it into tiny pieces.
5. Hard to find - The amount of mined gold has increased only slowly, rarely more than 2% per year.
Gold and silver are the only currencies not created and controlled by governments. All of today’s other currencies (dollars, euros, yen, pounds, renminbis, rupees, etc) are ‘fiat’ currencies, which means they do not represent anything tangible but are only worth something due to government decree (namely legal tender laws).