These days you cannot talk about gold and the economy without mentioning the gold standard. This was a monetary value system that linked gold to currencies. The currency used was silver 1and gold coins with gold being exchanged at a certain rate with paper currency. Back then, paper currency could be exchanged for gold and vice versa.
There were several countries that adopted the gold standard. This regulated the amount of money a government mint could print. A lot of countries adopted this standard and it seemed to work well up to the point where it became clear it would be unsustainable.
One crucial thing about the Gold Standard Act is that it did more to regulate the amount of money a government can print daily. The most significant advantage of gold is that it does not matter in what form it comes it is always valuable. You don’t have to be a big-monied investor who trades gold bullion coins and bars. You can find a cash for gold Melbourne dealer that can exchange any gold product from bullion to jewellery for cash. You don’t have to go into the technicalities of buying and selling gold or understand the gold standard to know how valuable your jewellery is.
During the Gold Standard era, gold was the official currency and everyone was using it to fund everything. However, even during World War I a lot of countries suspended the gold standard because there was less gold available to meet the financial demands of the wars. Suspending the gold standard allowed countries to print more currency which led to higher inflation. This happened several times whenever governments needed to shore up economies in timed of economic crises like during the 2008 global financial crisis and other things that have happened.
The gold standard was officially abandoned by the American government in 1971 and other governments followed suit. Whenever the government goes into a financial tailspin, more people rely on their investments and might want to sell gold bullion coins or bars.
Can we ever return to the gold standard?
Whilst a lot of people would call for the return of the gold standard many know that it isn’t likely to happen, even with talk about de-dollarising certain economies. One concern is that if any country were to have an economy that’s based on gold; that would mean the production of gold would have to go up. Gold is already a scarce commodity which is why you can always find a cash for gold Melbourne dealer who will buy used and old gold so it can be recycled and returned to the gold value chain.
The bottom line
Gold has continued to fascinate mankind for over 6,000 years. It is quite a unique metal. There really is nothing like it. People have wanted to own gold for various reasons, even gold jewellery has value. It can be seen as some sort of investment. These days people are less concerned about gold being currency but being an asset they can rely on when they need to. You would probably throw away any jewellery if it is damaged or unwearable but gold jewellery regardless of its condition should be harder to throw away, rather get some cash for it.