The thing that makes gold valuable in essence is the same thing that makes anything valuable. It is desired work. If something is desired by most individuals but takes little work to obtain like oxygen, its perceived value by most individuals will be low. The only thing that will change this perception is if oxygen is still desired by most individuals and the work that it takes to obtain it becomes more difficult. Something can take a lot of work to accomplish; an example is digging a one hundred foot hole in the middle of the desert; but if this task isn’t desired by many individuals or is not a process to produce, cultivate or obtain something that is desired by many individuals; the perceived value of the task will be low.
It takes a lot of work to obtain gold because of its rarity. Some of this work is finding it, mining it, refining it, shaping it and shipping it. All this work by itself is only half of the equation that gives gold its perceived value. The other half of the equation is gold’s desirability by many individuals. One reason why gold is desired by individuals is gold’s resistance to corrosion. Gold because of its resistance to corrosion is used in the jewelry industry. Gold doesn’t rust or tarnish and is ideal for making jewelry that will last the test of time. Another reason why gold is desired by individuals is gold’s ability to conduct electricity. Gold because of its resistance to corrosion plus its ability to conduct electricity; makes it ideal for tasks where copper can not be used. Some of these tasks are producing microchips and professional sound equipment.
Some last reasons why gold is desired by many individuals is gold’s uniformity. Pure gold is the same quality no matter what year or place it was mine. Another reason is gold’s ability to store, divide and combine wealth; Gold’s six thousand year old track record of preserving wealth; Gold’s low to no maintenance cost to keep it as an investment; Gold’s ease to liquidate; Gold’s density and difficulty to counterfeit. All these reasons and many more, that makes gold desirable to many individuals, coupled with the work it takes to obtain it; is the reason why gold is perceived as valuable to many individuals.
