What is Gold?
Gold, also known as the “yellow metal” has been one of the most important, famous, and sought-after metals in history. It is considered one of the world’s rarest metals, and has long been desired for its natural beauty, indestructibility and rarity. Pure gold is 24 carats (k), and is a symbol of purity, royalty, wealth and value.
Gold is technically a chemical element, and has the symbol “Au.” Although it is a dense metal, it is also soft and malleable.It can withstand moisture and many solvents. It emits a shiny yellow color, which is unchanged even when exposed to water or air. Gold is solid at normal temperatures, and occurs in nature as grains or nuggets. It is found often in rocks or soil deposits. It is believed that all discovered gold has been deposited in the Earth by meteorites that contained gold.Mining is economically viable only when gold is found in 0.5 parts per million or higher, even though such concentrations are invisible to the human eye. Gold can be mined in many forms such as flakes, grains or nuggets.
Gold has also lured many expeditions, gold-searchers and enthusiasts (ala the “California Gold Rush”) into regions that were rich with gold deposits. This has given rise to a substantial industry for the exploration and production of gold. Nearly 50% of all the gold that has been mined on earth has come from Witwatersrand. The Witwatersrand Gold Rush began in 1886, when huge deposits of gold were discovered there (in modern day Johannesburg in South Africa).
Today, around 50% of all the mined gold in the world goes towards making jewelry, 40% goes towards investments and 10% is used for industrial purposes.
Historically, gold has been used to make coins, art works and decorative items. Gold enjoys great demand for its use in making jewelry around the world.
Gold was used as a basis for physical currency for thousands of years. It was popular for exchange, and to store wealth, and has even been used as direct money (“gold coins”). For exchange, standardized gold bullion coins were produced that had specific weights and purity.
Many monetary systems have relied on the gold standard. Gold has been popular in the monetrary system due to its ease of use, rarity, ease of smelting, non-corrosiveness, and durability, which made it superior to lots of other metals.
Most European countries gave up the gold standard in around 1914, at the start of the First World War, due to large debts. The U.S. issued the last gold coin currencies and gold certificates in 1932. No country today uses the gold standard, but gold still enjoys considerable demand as an alternative to fiat money.
Despite abandoning the gold reserve system, Central Banks continue to keep some portion of their reserves in the form of gold, as a store of value and to guarantee debt.
Central banks of dozens of countries around the world hold gold bullion as a store of value and guarantee to debtholders. The U.S. holds 8,133 tons of gold (largest holdings of any country), while Germany holds 3,402 tons and the IMF holds 2,847 tons.
Gold is most in demand for international trade amongst all precious metals. It is considered an ideal store of value, such that the value of gold remains static anywhere and everywhere in the world.
Gold is also considered an investment by many, who buy bullion coins or bars, to hedge against inflation or instability. Most bullion coins are 24k, though some like the American Gold Eagle coins are 22k. The American Buffalo gold bullion coin has a 99.99% purity.
Gold prices have less correlation with the strength of the global economy, as compared to other metals (since Gold is used as investment). This is why Gold is an effective way to hedge against equity markets sometimes.
Because it is a good conductor of heat and electricity, gold is an important industrial commodity as well. It is also dense, yet soft, malleable and ductile, which is why it has many applications.
Besides its monetary, investment and historical value, gold is also used practically in dentistry, electronics, electric wiring and gold leafing. Gold is used in gold solders (for making jewelry), gold threads, coloring agents for glass, in photography, protective coating for artificial satellites,
Gold or gold alloys are used to coat bio specimens or plastics and glass to view under a scanning electron microscope. Gold is used to coat electric connectors found in various devices like audio and video cables, computers and connectors.
The color of Gold can be changed to make colored gold alloys, such as rose gold. Gold-copper alloys were famously used in antique Russian jewelry, while fourteen carat gold-copper alloys are used to produce police badges. White gold allows can be made with palladium and silver.
Gold can be used in food, as gold flakes or leaf, which is used to decorate gourmet foods and sweets.
Gold was also used in ancient and medieval times as medicine, although these reports are still in doubt regarding gold’s efficacy in health matters. Today, some alternative practitioners used gold in treating people. Some gold salts are anti-inflammatory and are used to treat arthritis.