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Store of value definition
A store of value is an asset that holds its purchasing power over time, so it can be saved and exchanged for goods later without losing much worth. Gold is a classic example, alongside stable currencies and some real assets.
An asset works as a store of value when its supply is limited and it resists decay, which protects savings from erosion. Gold qualifies because it is durable, scarce, and widely accepted, so it has held its long-run value across centuries even as currencies have come and gone.
A store of value is one of the three roles money plays; the cousin role is a medium of exchange, something widely accepted to settle transactions day to day. Cash is a strong medium of exchange but a weaker store of value when inflation is high, while gold is the reverse.
Store of value Example
You set aside USD 2,350 in cash and the same amount in gold, then leave both untouched for a year of high inflation.
If consumer prices rise 8 percent over the year, the cash loses real purchasing power: USD 2,350 ÷ 1.08 ≈ USD 2,176 in today's buying power
If gold keeps pace with inflation, it better preserves what your savings can buy. These figures are illustrative.
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