The modern functions of gold and silver are a lot more dynamic than many people realize. Yes, jewelry is a popular usage for precious metals, but it is hardly the only market that creates outside demand. Everyone from investors to automobile manufacturers has an interest in precious metals. Without the diverse source of demand for gold and silver, prices would be affected greatly.
The two most common places you will find gold and silver are in the form of jewelry or investment. The third primary function of metals is found industrially. The types of metals used vary across the board, with investors owning the majority of pure gold and silver in the world.
It is important to note that the term “investment” does not specify an individual holding gold and silver. Everyone from everyday citizens to entire countries invests in precious metals. This is one of the characteristics of gold and silver that makes it so unique. You aren’t going to find many global powers buying up shares of a public company, but rest assured that almost everyone is ensuring that they own their fair share of gold and silver.
Function as an Investment
Gold and silver are the most enduring form of currency and investment in the world. If you want to buy paper money today, you can expect it to be worth the same exact amount (at least on paper) in 20 years. If you buy gold or silver, however, you have a very reasonable chance of seeing your investment multiply when measured in dollars. This is the difference between investing money and having money.
The reason that countries have become so interested in owning precious metals relates directly to their confidence levels in worldwide currencies. If a government is given the choice of having assets in the form of a currency that has the potential to become worthless or gold and silver which has sustained significant value for thousands of years, you can see why they have been going to metals more and more frequently as the years go by.
One of the most active times for gold and silver trading is when there is economic worry. Though the exact correlation is debated among economic experts, many feel that metals are one of the safest bets in a time of uncertainty. With that said, however, the past 100 years have seen many sizable runs in many directions in both the gold and silver markets. While unusual economic conditions can certainly spur big movements in the world of precious metals, they are not an absolute requirement.