Fundamentals of Gold Inheret Value

Understanding the fundamentals that drive the price of gold is important before buying gold coins or rare gold coins.

Keep in mind that the fundamentals are the strongest factors that affect the price of gold though they are not the only ones. Understanding the fundamentals should also help you better understand other factors that may play a role.

In its simplest form the ultimate fundamentals for gold is supply and demand.

Gold by nature is scare. Gold may not seem as scare with millions of gold bullion coins minted that are in circulation though when you consider how many people don't have a position in gold you start to understand its scarcity. Gold has been a treasure by people for thousands of years.

It truly is not easy to get gold from a basic level. Many miners have lived and died in gold rushes like the ones in California and Alaska. The reality is that most of the miners from different gold rushes throughout the years left empty handed.

You may say now it isn't hard as you can go to a reputable brokerage firm and pick some up. The effort to do this isn't measured in sweat though in the dollars it then takes to get gold in its monetary form as gold bullion coins or bars.

Just think it takes on average 10 tons of ore to produce 1 little ounce of gold. The scarcity is what gives gold its inherit value before any other factor is applied.

Today the demand for gold is outpacing the production and mining of gold due to economic crises as gold has become a safe haven for preserving wealth.

One test to the true value of gold is that its value is so great it is estimated that almost all gold ever minded is still accounted for.