Importance of Gold coin in an economy

For thousands of years Gold coin has been a pillar of tangible, storable and transportable wealth. Gold has always been a staple of global currency, a commodity, an object of beauty and an investment. Gold is unique in that it does not carry a credit risk. Gold is no one‘s liability. There is no risk that a coupon or a redemption payment will not be made, as for a bond, or that a company will go out of business, as for an equity. And unlike a currency, the value of gold coin cannot be affected by the economic policies of the issuing country or undermined by inflation in that country. Gold is one of the most widely discussed metals due to its prominent role in both the investment and consumer world. Even though gold is no longer used as a primary form of currency in developed nations, it continues to have a strong impact on the value of those currencies. Moreover, there is a strong correlation between its value and the strength of currencies trading on foreign exchanges . The value of a nation‘s currency is strongly tied to the value of its imports and exports. When a country imports more than it exports, the value of its currency will decline. On the other hand, the value of its currency will increase when a country is a net exporter.

 

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