Gold is the life belt for all seasons, especially the dangerous ones.
--Timothy Green
Gold and silver have been sought and prized since prehistoric times. They have also been both a cause of war and a medium of exchange.
Gold has traditionally been the standard by which the value of anything is assessed; it has also been a universally accepted medium of exchange. Silver does not lag far behind in the history of global trade. In fact, till the nineteenth century silver was actually more widely employed than gold as the standard of value.
The Indians' faith in God and gold dates back to the Vedic times; they worshipped both. Historian Pliny complained that her Indian trade drained ancient Rome's bullion resources. Indian merchants always demanded payment in silver during the times of the East India Company; so much silver was exported from London that East India Company teetered on the brink of financial disaster.
According to the World Gold Council Report, India stands today as the world's largest single market for gold consumption. In developing countries, people have often trusted gold as a better investment than bonds and stocks, particularly because historically these acted as a good hedge against inflation. In that sense these metals have been more attractive than bank deposits or gilt-edged securities.
Why people buy gold
Despite recent hiccups, gold remains an important and popular investment for many reasons:
- In many countries gold continues to be an integral part of social and religious customs, besides being the basic form of saving. This continues to be exceptionally true in India, which is the world's largest consumer of gold. Shakespeare called it 'the saint-seducing gold'.
- Superstition about the healing powers of gold persists. Ayurvedic medicine in India recommends gold powder and pills for many ailments.
- Gold is indestructible. It does not tarnish and is also not corroded by acid - except by a mixture of nitric and hydrochloric acids.
- Gold has aesthetic appeal. Its beauty recommends above all other metals for ornament making.
- Finally, gold is scam-free. So far, there have been no Mundra-type or Mehta-type scams in gold.
