Throughout human history, gold and silver have functioned as money due to their rareness and unique properties. Precious metals are a proven medium of exchange, portable, divisible, interchangeable, durable, and valued across the world. It’s remarkable that human civilizations of different eras, cultures, and geographies - all valued gold and silver, even though they had wildly different beliefs and ways of life. It almost seems as if the value of these assets is wired into our DNA.
Until 1971, all major currencies were backed by gold reserves, however, this changed under the Bretton-Woods agreement which severed the link between fiat currencies and gold. Now, gold and silver are less seen as money and more viewed as an investment option to protect purchasing power and tend to outperform during periods of high inflation and weak economic growth. Besides investment demand, there is also industrial demand for gold and silver due to their antimicrobial properties and ability to conduct electricity.
