The hard commodities are the backbone of the international markets. The earliest monetary values one has heard of is gold coins. Ever since the start of the economic activity in the world man kind has had the need to have something of value that is universally acceptable. Very early on it turned out that Gold and silver was just that kind of commodity that will have value to most people.
It was soon evident that for any other money notes or coins to have value it will have to be "backed" by the underlying value in Gold or other precious metal being kept in the custody of the country that has printed or manufactured the moeny.
The other interesting fact is that worldwide the economy even today has the tendency to "run" to gold if anything starts to fail. We have had several occasions in the history of man where world economy failed and the only safe haven was for investors and banks to run for gold.
There are of course also Platinum, Palladium and Silver. So we get the interesting situation that when confidence in the world economy is high the price of the other hard commodities tend to rise while the price of gold tend to be stable to even decrease.....
The worldwide trend for the money to be backed by Gold in the repositories tend to be the reason for Gold to be so popular.
JD
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