The Macroeconomic Perspective

Gold and Silver are assets which have been of great importance for thousands of years. Up until a few decades ago, gold was explicitly linked to currencies (such as the US$) and was broadly used as money. In the past few decades – particularly following Nixon’s decoupling of the gold/dollar convertibility – precious metals have been greatly criticized by leading academics and investors alike. Warren Buffet famously called gold a “barbarous relic”, but is he right?

Gold’s scarcity and physical characteristics (longevity, divisibility etc) allowed it to become the main form of money for centuries. However, technology advances and continuing financial innovation have taken away a big part of its appeal. Silver’s monetary role always played second fiddle to gold, but it compensates by having extensive industrial use.

Read more on Business Insider