If you are thinking of investing in gold and want to learn more about what gold is, its origin and what is gold used for; by scrolling down you will learn why this commodity is more than just a precious metal used in a piece of jewellery.
What is gold?
Gold is a precious metal. Its chemical symbol is Au, and it appears in 79th position of the periodic table making it one of the transition metals.
Pure gold is yellow with a slight reddish tinge. It is soft, ductile and malleable and chemically stable, being one of the least reactive elements.
As a society, we have had a relationship with gold since the earliest days of civilisation. Attracted by its beauty as well as its practical purpose as a commodity, our relationship with gold is unique.
In antiquity, it was the metal of the Gods; it has underpinned international economies; it has multiple industrial, scientific and medical applications; and we are still discovering new ways to use this metal.
Where does gold come from?
When the earth formed, most of the gold it contained sunk to the molten mantle where it became incorporated in iron and other metals, so why is it that we find gold on the planet’s surface?
The current theory is that all the mine-able surface gold arrived via meteors around 3.8 billion years ago. Not everybody agrees; some scientists argue that it has been here all along and reached the surface through volcanic activity.
Despite noble attempts by the alchemists, gold cannot be produced synthetically apart from tiny amounts that can be synthesised in nuclear reactors. So, all of the gold we produce and will produce in the future is mined.
There is one caveat: gold–bearing asteroids in the asteroid belt between Mars and Jupiter are thought to contain vast quantities of gold.
The future NASA Psyche mission will target a gold–rich metallic asteroid estimated to be worth £8,000 quadrillion except nobody has figured out how to drag it down to earth.
What is gold used for?
As a medium of financial exchange:
Gold has been used as a medium of monetary exchange for over 6,000 years. In the early days of paper money, notes were backed by gold held in safekeeping.
The Gold Standard, introduced in the mid 19th Century, guaranteed that the government would exchange money for its equivalent value in gold. The Gold Standard was abandoned in 1971.
Jewellery and ornamental objects:
Arguably, its use in making jewellery has always been the most significant application of gold; it accounts for 78% of total gold consumption. Gold is prized for its lustrous appearance; colour; tarnish resistance; scarcity and malleability.
Pure gold is rarely used for this application as it is too soft; so alloys with copper, silver, palladium, and other metals are generally used. Alloys have characteristic colours such as white gold and red gold.
Electronics:
The electronics industry is the largest industrial consumer of gold. Gold is an excellent electrical conductor, and it doesn’t tarnish. This makes it suitable for electrical contacts in connectors, switches, relays and wiring.
It can be cold welded readily, and this property is used to form the connections between silicon chips and the package enclosing them.
Medicine:
Gold is biologically inert making it attractive to several aspects of medicine and dentistry. The earliest known application was the use of gold wire for securing false teeth in 700 BC and gold alloy fillings for teeth have been in use for at least 1,000 years.
Other medical uses of gold include irradiating tumours with radioactive gold pellets; radioactive gold is also used as a diagnostic tracer; injection of gold salts to treat rheumatoid arthritis; treatment of lagophthalmos (an inability to close the eyes) by implanting gold into upper eyelids. Gold is also used in certain surgical instruments.
Aerospace:
Gold is used as an infrared reflector in spacecraft and on astronauts’ visors, and as a lubricant able to function in a vacuum.
Colours:
Gold is used in paints and stains for porcelain and glass producing colours ranging from pink to maroon. It is also used to make infrared reflecting glass for climate control of buildings.
Gilding:
The malleability of gold allows it to be beaten into sheets just a few microns thick. The resulting “gold leaf” finds applications such as decorative gilding of books, furniture, frames, and the internal and external surfaces of buildings. It is used in food products such as gold leaf on wedding cakes.
Investing in gold
If you want to learn more about investing in gold or how gold mining operations work, then please click on the links.
