Beginner's Guide To Gold

  1. Chemical Makeup - Terminology
  2. History Lesson
  3. Scarcity and usefulness in technology
  4. How everyday people use Gold Today.
  5. How to purchase Gold

For thousands of years, Gold has been one of the most prized possessions in the world. A natural but limited resource that must be extracted from deposits within the earth's crust, Gold is unrivaled in terms of beauty and chemical composition. This inherent aesthetic and industrial value makes Gold a vital asset for investors today, just as it was 5,000 years ago. Here we will discuss the unique composition of Gold, as well its use throughout history and guidance for adding this Precious Metal for your investment portfolio.  

Chemical Properties of Gold

Gold is naturally inert, which means it does not typically respond to other elements with a chemical reaction. It is mostly unaffected by water, oxygen, and other gasses, retaining strength and beauty even when exposed to harsh environments. Copper, for example, turns green over time, even in a stable setting, but Gold will stay shiny and beautiful forever. If an object made of Gold becomes soiled with dirt or debris, it can be wiped quickly wiped clean without the need for solvents or abrasive chemicals.

The symbol for Gold on the periodic table of elements is Au. It has an atomic number of 79, higher than many other naturally occurring elements. Pure Gold is bright and shiny, with a reddish yellow color admired for centuries. This unique coloring is due to plasma oscillations in Gold's valence electrons being in the visible range. Most other metals are gray, white or silvery in color. When alloyed with other elements, the color changes, and many of these hues are noticeable from well-known types of jewelry. Rose Gold, for example, is a Gold and Copper allow, while White Gold is commonly created by allowing Palladium or Nickel.

Deposits of Gold within the earth's crust often occur in veins but have also been discovered in the form of grains and nuggets. It is often found within deposits of Silver or alloyed with Palladium and Copper. Gold is one of the rarest elements in the world. If all the Gold in the world were brought together and melted down, there would only be enough to fill approximately one Olympic-sized swimming pool.

Along with Tungsten, Copper and 35 other elements, Gold is classified as a transition metal. The properties associated with transition metals include low ionization energies, malleability, and conductivity. Gold is highly malleable and can be stretched and pulled into wires and thin sheets for industrial use. It is also very dense, and therefore, heavier than other metals like steel. If you have a Steel pipe and a Gold pipe that is the same size and shape, the Gold pipe will weigh nearly three times as much as the Steel one.

Even though Gold is dense, it is softer than many other metals. This attribute makes Gold appealing to artists because it is easily molded, sculpted and manipulated into any shape. Gold leafing is made by hammering pure Gold into sheets thinner than a human hair. One ounce can create 100 square feet of leafing.

While many people think Copper is the most ductile metal, the truth is that this distinction belongs to Gold. Minerals that are ductile can be drawn into skinny wires, and Gold does this better than all of the others. One ounce of Gold can be shaped into a wire nearly 50 miles long. Gold wire is often used in precision electrical circuits since it is also a good conductor of electricity. It's not as good of a conductor as Silver, for example, but it does resist corrosion better than any other option.

History of Gold

The practice of mining for metals has been around for thousands of years, and Gold was one of the first to be mined. Gold can often be found in its natural form and easily identifiable to the human eye because of the unique color. It was used to make decorative objects starting more than 5,000 years ago. Gold's history as a decorative element representing wealth and power goes back further than its legacy as a form of currency. Wars have been fought and countries conquered in the quest for Gold. Not to mention the physical risk many people have taken in searching for this rare natural element.

Trinkets and jewelry made from Gold have been found in countless graves of royalty and nobility. The tomb of the ancient Egyptian ruler Tutankhamun included an extensive array of items made from the yellow metal. Jewelry made from Gold is a status symbol in almost every culture around the globe to this day. While fashion trends are known to come and go, Gold is one of the few materials that has retained its luster throughout many generations.

European Gold produced in ancient times can usually be traced back to deposits in the Middle East. Mines have been discovered during excavations near the Red Sea and around the Upper Nile. Egyptian pharaohs got most of their Gold supply in the Nubian Desert. However, Gold is rare, which is one of the reasons it is so desirable. These mines eventually ran dry, and ancient civilizations had to look elsewhere.

On the other side of the Atlantic, the Aztec and Incan societies most likely got their Gold fortunes from Columbia. Some believe that the mountains of the Sierra Madre were another source for the Aztecs. Spanish conquistadors plundered much of this Gold, and took back to Europe.

Since Gold is incredibly rare, many people have tried to find alternative ways to produce it through chemical reactions with other elements. Archaeologists have discovered evidence that attempts to create Gold bullion occurred in early Egypt as well as Greece and Arabia. The "science" of creating Gold was called alchemy and became extremely popular during the Middle Ages. While alchemy never produced any real Gold, of course, it did lead to the early discovery of many unique properties that were not common knowledge at the time. Stories from alchemists, such as the idea of the magical Sorcerer's Stone, also added to the beauty and mystique of Gold, solidifying its value to humankind.

One chemist, Glenn T. Seaborg, did create Gold in 1980. Using a particle accelerator, he altered the nucleus in atoms of Bismuth. However, the costs associated with producing this laboratory metal were far higher than the value of the Gold produced.  

Around 600 B.C., coins made from a combination of Gold and Silver began to appear. Shortly after, pure Gold coins were circulated. The Roman Empire relied heavily on Gold and Silver coins for money. Following the Roman Empire's fall, countries in Europe used coinage made from a variety of metals, but Gold coins have always carried the most value.

Today, Gold is still used as a universal means of money exchange. Central banks all over the world own stockpiles of bullion, mostly in the form of bars. In the U.S., most of the government's Gold is in Fort Knox, near Louisville, KY. The bars are 7 inches long, approximately the size of a clay building brick. Altogether, the stockpile is worth more than $130 billion.

Uses of Gold in Technology

The physical properties of Gold are just as rare as the metal itself. It is so rare that every hour, more Steel is poured across the continents than the entire amount of Gold produced in all of known history. From malleability to conductivity, technology continues to find more uses for the Precious Metal each year.

Gold is non-toxic in the human body, and completely edible. It has been used in coffee, tea, candy, and even as an upscale (and expensive) dessert topping. For hundreds of years, it's been added to liquor to create a sparkling effect when a drink made. Some health food companies suspend particles of Gold in water, intended as a nutritional supplement.

Dentistry has been using Gold to fill cavities for 3,000 years. It is useful for fillings, crowns, bridges, and even braces. Gold salts can be used to reduce swelling, prevent damage, and cure jaw pain after surgical procedures.

Doctors and pharmacists have long made claims about the healing properties of Gold. In the 14th century, one supposed cure for the bubonic plague as to drink molten Gold with crushed emeralds. Today, Gold is used to trade arthritis and can be taken orally or injected directly into muscles. With scientists acknowledge the benefits of Gold to ease inflammation and pain, there is no clear explanation as to why it works. One recently discovered use of Gold is for the delivery of other medications. Tiny capsules of medicine covered in Gold travel to targeted cells in some modern cancer treatments.

The flexible and inert nature of Gold makes it ideal for microelectronics build to go inside the human body.  The technology is still evolving, but the hope is that these devices can be inserted to monitor vital signs and alert doctors to early warning signs for chronic illnesses.

The National Aeronautics and Space Administration (NASA) seems to be hungry for Gold. This unit of the U.S. government uses Gold as an efficient way to deflect light and heat on space equipment. Thin Gold plating is often found on windows to protect against radiation. It is also an excellent reflector of infrared light, used in the mirrors of high-powered telescopes. Here on planet Earth, Gold is sometimes used to keep buildings cool and lower carbon emissions caused by air conditioning.

Other potential technological uses include nanoparticle ink to create circuits in electronics made of plastic. Gold nanoparticles have been tested in touch screens, microprocessors and data storage. These nanoparticles are already a crucial component of Rapid Diagnostic Tests (RDTs) used to diagnose many debilitating diseases.

Everyday Uses of Gold

In an average year, the vast majority of the world Gold supply, more than 75 percent, is used to make jewelry. This ratio has been real for centuries. In 2018, demand for gold jewelry in the United States alone reached a 10-year record high. It is famous for its beauty, of course, but also resilience against daily wear. Silver will tarnish over time and requires chemicals to clean. Gold, however, returns to a like-new appearance with just soap and water.

While color and durability are essential reasons for Gold's popularity, it is also forever intertwined with many mystical and symbolic beliefs. In India, decorating the body with Gold jewelry is said to bring about wealth and eternal blessings. Many Christians see the metal as an icon of virtue and divine wisdom. Ancient alchemists believed that Gold helped purify the human body, leading to mystical beliefs of light and purity to this day.

Coin collecting is another area where you hear frequent discussions about Gold. Most sovereign nations no longer mint authentic Gold coins for circulation, so preceding examples of pure Golds are highly sought after. Modern mints do make commemorative and investment-grade Gold coinage. Some of these series have collectible value in addition to inherent value from the bullion used to make them.  

The list of electronics manufactured today that rely on Gold as a component is extensive. Watches, pacemakers, boats, jet airplanes, military submarines, and computers typically have at least one Gold part. Some calculators use Gold on the back of each key, transmitting a tiny electrical signal with each press. When you see those kiosks at supermarkets offering to buy back even older cell phones, recycling the Gold content inside is one of the ways these companies make money.

Cell phones and portable communication devices nearly always contain Gold. On average, and depending on current Gold prices, every mobile phone includes more than 50 cents worth of the Precious Metal. It is used because of its unrivaled durability since smartphones are now a part of daily life in many places. Memory chips in laptop and desktop computers are also made with Gold.

Since Gold is the most prices of all Precious Metals, it is commonly used to make awards, statues, and first place medals. The statuettes handed out at the Academy Awards in Hollywood use Gold plating. At the Olympic Games, Gold has been used to make the first place medals for many years. Initially, the winners' medals were pure Gold, but today, they are made from Sterling Silver and plated with fine Gold. This combination is cheaper, of course, but also makes the awards more durable.

As our homes become filled with connected electronic devices, industrial uses for Gold continue to rise. Nearly any device in your home that communicates via the internet will have at least one switch or circuit made with Gold. Innovations are currently underway in the area of wearable technology. Product manufacturers are testing things like Gold threads in clothes that turn the entire garment into a solar panel. What does a person do with a wearable solar panel? Charge their cell phone, of course.

How to Buy Gold

Until recently, only the wealthiest people in the world could afford to own Gold. Many historical monarchs and upper-class business owners coveted Gold as a store of wealth, going as far as to plunder the supply of entire nations. Luckily, anyone can invest in the yellow metal today, and enjoy the benefits of holding a universally respected form of currency.

Most banks do not offer the ability to walk in the door and purchase a bar of Gold. They may have reserves stored within their vaults, but these bullion pieces are not for sale to the general public. Likewise, you cannot ring the doorbell at Fort Knox and purchase a bag of Gold coins from the U.S. government. There are, however, many accessible ways to buy Gold as an investment for you and your family.

Most likely you've encountered a Gold retailer, either in your home town or online. Reputable Gold sellers are part of a respected, verifiable network. They have associations with sovereign mints and Precious Metals distributors from around the world. While you still might find a fraudulent Gold dealer here and there, the internet has made it easy to research a firm before making a purchase.

When you research the Gold products available from retailers, you may notice that the increments are standardized. Therefore, buyers must purchase bullion coins and bars in the exact amounts available for sale. Because Gold is so expensive, some buyers must save up before they can afford to invest in everyday Gold products, such as 1 oz bullion coins. Smaller, incremental Gold pieces are available, but at today's prices, you'll still need several hundred dollars to pick up a quarter-ounce coin.

Digital Gold is a modern way to buy Precious Metals with fewer restrictions than traditional retail options. A digital marketplace means you can buy, sell, redeem and manage Gold investments online. While there is a certain appeal to owning real Gold coins and bars, transporting and storing these products requires work. Most banks will not save Precious Metals for you, because their insurance policies do not cover damage or theft of bullion.

Many reputable companies specialize in the storage of Precious Metals. These firms charge a set storage fee, but can also charge for things like accepting deliveries of Gold or transporting elsewhere when you sell it. That being said, traditional Gold products are still a good investment.

When you buy digital Gold, you don't have to accept delivery of the actual bullion. All transactions are independently verified, with a ledger that permanently records proof of purchase. Your Gold remains in storage at a secure vault, eliminating the need to ship your metal. You still have the option of redeeming your digital holdings for physical coins, bars, and rounds. If you are ready to sell your assets, you just sign into your online dashboard and the transaction is complete in minutes.