Gold as a Precious Metal
Gold is a precious metal that has been around for thousands of years and still has a significant place in our culture. It's a favorite material for jewelry and coins, but it also plays an important role in the financial industry as well as the medical, dental, and electronics industries.
Purchasing Gold
Gold can be purchased in a variety of forms, including coins and bars, as well as in exchange-traded funds (ETFs) that track the price performance of mining companies. Buying physical gold, however, can be expensive and can require the investor to safeguard and insure the metal.
Investing in Gold
Gold prices are always affected by interest rates, but the real rate of interest (prevailing interest rate minus inflation) is much more important than the nominal rate. Generally, when interest rates are rising, gold is considered to be undervalued. During a recession or a stock market downturn, gold is seen as a safe haven and often rises in value.
A History of Gold
Gold has a long history as an investment, and for good reason. Its unique qualities make it a desirable material for many different applications.
Beauty and Durability
Known for its beauty and durability, it's the material of choice in jewelry and coins and has been used since ancient times to make royal or sacred objects. It is one of the most valuable materials in the world and can be found in a wide variety of uses, from pirate's booty to microcircuits.
Chemical Reactivity and Conductivity
It is the most noble of all the transition elements, meaning it is the least chemically reactive towards atoms or molecules at its interface with a gas or liquid. It is able to form chemical bonds with other metals, and it is an excellent conductor of both electricity and heat.
Industrial Applications
The unique properties of gold allow it to be incorporated into the design of microcircuits, which is why many modern computers and cell phones use a gold-plated connector. The gold helps to protect the circuits from corrosion and provides a better signal transmission between the computer's processors and the external components.
Reflectivity and Protection
In addition, gold is a good reflector of electromagnetic radiation such as infrared and visible light. It's a popular coating for artificial satellites and astronaut's helmets to help control temperature and protect from harmful UV rays.
Medical and Other Uses
It's also a popular material for dental work and fillings because it is a nonallergenic metal. Moreover, it is used in the construction of high-end CDs and DVDs because it provides a reflective layer that reduces noise.
Gold as an Investment
Because of its long-term value and stable supply, gold has become a popular investment option for people around the world. It's also a safe haven in times of turmoil and has proven to be resilient when compared to other types of investments.
