Humanity’s obsession with gold is well-documented. Gold is often seen as a symbol of wealth and power. Throughout history, it has been used as a form of currency, jewellery, and decoration for centuries. But why is gold so prized? Why do we find gold so captivating? And what does its popularity say about our society? In this blog post, Max Warren Barber Ceo of SION Trading Fze will help us understand our obsession with gold and why it has such a hold on us.
The history of gold and its many uses
But gold isn’t just ‘precious’ because it’s rare. It’s also an extremely useful metal – one that’s both pliable and highly conductive. As a result, gold has a number of different uses including technology, healthcare, financial markets, among others.
Gold is known as a valuable and coveted metal that has been used for currency, jewellery, and other decorative items for centuries. In this blog post, we’ll take a look at the history of gold and some of the key moments that have made it one of the most sought-after commodities in the world.
Gold is found in electronics. Many everyday devices, such as HDMI cables and the core of computer processors, contain gold because it easily conducts electrons. As a result, it is found inside all manner of household items; including television sets, mobile phones, cameras, and is commonly used in circuit boards – electroplated onto all kinds of connectors and capacitors.
It’s also commonly found in all components of desktop and laptop computers as it enables the fast transferral of data too. It’s high performance, long-lasting, and easy to use.
Gold’s conductive properties are also prized in aerospace – particularly in space travel. It’s often used as a vehicle coating on top of polyester film, as gold can reflect infrared radiation and reduce the amount of heat that machinery absorbs in space.
Gold is also used as a lubricant between mechanical parts in space equipment – again, as it can withstand radiation and heat better than other organic elements. In zero gravity, gold molecules slide past one another to create the lubricant effect.
Gold teeth may not be as common as they used to be, but given that gold is malleable, high performance and doesn’t react to other elements (unlike iron) it’s still highly-prized in dentistry – and has been for over 2,500 years.
But gold’s use in medicine doesn’t stop there. It’s also a key component in many medical devices and instruments – and is even used in some medicines to treat everything from arthritis to certain cancers.
Gold is bright, radiant and attractive to look at — it captures the human imagination. And, due to its rarity, it’s historically been associated with wealth. From a more practical standpoint, the fact that it is non-abrasive, non-reactive and easy to shape, means it is highly desirable to be worn on the body.
Gold is also very easily shaped to hold different gemstones and can be fused with other metals to create durable (and attractive) alloys.
Gold may come in many different forms – gold coins, bars, and nuggets – but given its popularity and enduring value, it will always be a desirable commodity. Unlike other financial investments, it’s a real, tangible material – something that can be physically bought, sold, or held onto for generations.
Why humans are so drawn to it
When it comes to precious metals, gold is king. It has been prized by humans for centuries for its beauty and rarity. Humans have been drawn to it for centuries, seeking it out for its beauty and rarity makes gold so special. It is rare, shiny, and has been used as a form of currency for thousands of years. Some scientists believe it’s because our brains are hardwired to appreciate its beauty, while others say that it’s because gold doesn’t corrode or tarnish over time. No matter what the reason may be, it’s clear that gold will always hold a special place in human society.
How the price of gold is determined
Several factors determine the worth of gold, some being more volatile than others, but each contributing to the frequent shifts in the price.
Value of the Dollar
Generally, the market price of pure gold is inversely proportional to the worth of paper currency, as are most other precious metals. To the average investor, it works as a hedge against poor economic times. Having some of your portfolio diversified into bullion-like coins or bars protects it against being completely devalued if the market took a turn for the worse.
As a result, the stronger the US dollar is, the tighter the control of gold prices. Inversely, the weaker our currency is, the higher the demand for the metal to bolster investors’ assets.
Regularly High Gold Demand
Several highly profitable industries are regular gold buyers, which drives demand across the world. For example, the jewellery industry alone is responsible for purchasing half the bullion available in any given year for gold jewellery, driven mainly by India, China, and the US.
Another driver of high gold purchases is the central bank. Their precious metal purchases to transfer some of their wealth into physical assets heavily affect the current market price and safeguard the nation’s purchasing power.
Precious Metal Supply
Any increases or decreases in the gold supply will inevitably affect the demand and price of gold as well. Major mining operations worldwide provide several tons of gold a year, keeping the global supply stable, demand low, and price fluctuations to a minimum. However, because mines need to find gold consistently to maintain the gold rate, they need to dig deeper and deeper to find viable veins.
Mining companies need more money to maintain deep mines, but brittle rocks and other factors risk the miner’s health. Because of these factors, running a mine often costs far more than selling the gold they find a market price would recoup; as a result, the worth increases proportionally to a mine’s operational costs, increasing demand if the mine ever goes dry.
Gold investment options
When most people think about investing in gold, bullion is what they think of—big, shiny gold bars locked away in a vault.
Gold bullion comes in bars ranging from a few grams to 400 ounces, but it’s most commonly available as one- and 10-ounce bars. Given that the current gold price is around $1,900 per ounce (as of September 2020), this makes investing in gold bullion an expensive proposition. And unlike stocks, there’s really no way to get a fractional share of a gold bar.
Due to gold bullion’s high price, it’s especially important to use a reputable dealer and to pay for delivery—with insurance—or to shell out for storage at a large vault or in a safe deposit box.
If you choose to invest in gold with bullion, it’s also a good idea to stay up to date on the price of gold, so you can pick the right time to buy—most dealers update their prices based on current spot prices.
The future of gold
Max Warren Barber Ceo of SION Trading Fze predicted that different experts vary and depend on how the market will respond to inflation, the central bank’s policy, and geopolitical tensions.
High volatility has been influencing the stock markets since the very beginning of 2022. At the same time, gold’s price growth has been quite steady, and the uptrend is continuing. Inflation is the core factor that will impact the price of gold in the near future. It is at the highest rate in the US in the last forty years. Gold’s status as the top hedging instrument against inflation is likely to push the prices further, reaching more than $2,000 per ounce.