7 Gold Myths Debunked: What Most People Get Wrong about This Precious Metal

 

Gold has a long history dating back to at least 4,000 BC, so it’s no surprise that misconceptions about this ancient precious metal are still alive and well today. Below, the reputable professionals from First National Bullion, the best place to buy gold in San Diego, go over some of the most common misconceptions told and believed about gold.

1. The Gold Standard Is an Ancient Relic

While no countries currently use the gold standard anymore, many countries still hold gold in reserve for emergency situations. You can even say that individuals owning gold have their own gold standard, since they’re keeping gold to back up and protect their paper or digital assets.

2. Gold Pays No Interest

Federal Reserve notes or “dollars” don’t pay interest unless they’re sold or given to another party. Gold does offer a return in other ways, even though it may not be called “interest.” Also, there are gold leases and loans that do pay interest. Gold that’s personally owned and held can offer a return if it’s sold for higher than the original value.

3. Gold Can Be Confiscated

In 1933, President Franklin Roosevelt signed an executive order that required Americans to turn in their gold. The idea was to build the nation’s cash reserve and restore faith in paper money during the Great Depression. Largely ignored by many Americans, the order was repealed back in the early 1970s and is no longer in effect.

4. Gold Isn’t Money

Gold has been used for many centuries to restore confidence when paper currencies collapsed. Recently, Wyoming, Arkansas, Utah, and Oklahoma passed legislation making gold and silver legal tender. Other states are considering similar actions.

5. Gold Isn’t Practical because Merchants Can’t Make Change

Even if someone drops a gold bar on the counter to pay for gum or cigarettes, he or she can still get change. Gold comes in a wide range of sizes and shapes, including coins and rounds of varying denominations. These smaller gold pieces can be used to make appropriate change based on the value of the gold involved.

6. Gold Has No Practical Uses

Gold has many practical uses today. It’s used for cell phones, dental materials, electronics, and even on roofs for shingles or as sheets. Gold is soft when it’s not mixed with other metals, which makes it easy to work with in many industries. It’s even in space on the James Webb Space Telescope. Gold is also highly valued for its industrial uses because it doesn’t tarnish or break down over time.

7. Gold Can’t Be Created in a Lab

This is somewhat true, but not entirely. During the Middle Ages, alchemists often lost their heads when trying to create gold for kings. Gold was once created in a lab, although it turned out to be radioactive. Today, although new gold can’t be made, gold is in a sense “created” by international banks by selling claims on physical gold through futures, options, and exchange-traded funds.

 

If you’re considering buying gold, don’t let misconceptions guide your decision—seek advice from trustworthy professionals with years of expertise. No matter what type of precious metals they’re looking to buy or sell, from palladium bars to silver bullion or gold coins, San Diego residents trust the reputable dealers at First National Bullion. You can rely on our experienced professionals when you’re looking to add precious metals to your collection or investment portfolio. Call one of our precious metals experts.

 

The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.