Best of the Week
Most Popular
1.BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - Nadeem_Walayat
7.Gold And Silver – Insanity Is World “Norm.” Keep Stacking! - Michael_Noonan
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.Gold And Silver: Security, And BREXIT - Michael_Noonan
10.BrExit Vote - "The Trend is Set" -- And What You Should Pay Attention to Next - EWI
Free Silver
Last 7 days
BrExit Stock Market Upwards Crash as FTSE Recovers 100% of Friday Plunge - 30th June 16
Stock Market Rally Runs Out of Steam - 29th June 16
Rapid Growth:The Financial Trends Of Online Gaming - 29th June 16
FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - 29th June 16
Stock Market Bounce May be Over - 28th June 16
Stock Market Meltdown Likely to Drive Gold Towards $1,500 - 28th June 16
Brexit Victory over the EU Globalists - 28th June 16
Brexit Psyop: Greenspan Falsely Blames the Brits for the Crash and Chaos to Follow - 28th June 16
Greenspan Calls Brexit a ‘Terrible Outcome’ as Euro Area Tested - 27th June 16
Stock Market SPX Below Mid-Cycle Support - 27th June 16
Best Holidays for Summer 2016 - 27th June 16
Another Stocks Bear Market? - 27th June 16
BBC EU Referendum Result Highlights - YouGov, Markets, Bookmakers, Pollsters ALL WRONG! - 26th June 16
Investors Map Post-Brexit Strategies Amid Global Market Upheaval - 26th June 16
Gold Price Weekly COT Update - 26th June 16
First the UK, then Scotland ... then Texas? - 26th June 16
Stocks Bear Market Resumes or Just More Noise - 26th June 16
Gold And Silver: Security, And BREXIT - 25th June 16
Dow, Euro & Brexit Recap - 25th June 16
Resistance Holding Gold Stocks after Brexit - 25th June 16
Venezuela vs. Ecuador (Chavismo vs. Chavismo Dollarized) - 25th June 16
Gold, Silver And PM Stocks Summer Doldrums Risk - 24th June 16
Here’s Why China “Economic Hard-Landing” Worries Are Overblown - 24th June 16
Jubilee Jolt: Markets Crash, Gold Skyrockets as Britain Takes Brexit - 24th June 16
BrExit Morning - New Dawn for Britain, Independence Day! - 24th June 16
LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - 24th June 16
Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - 24th June 16
EU Referendum Shock Results Putting BrExit LEAVE in the Lead Hitting Sterling Hard - 24th June 16
Final Opinion Poll Gives REMAIN 52% Lead, Bookmakers, Markets and Pollsters ALL Back REMAIN Win - 23rd June 16
Does BREXIT Matter? Outlook for Sterling - 23rd June 16
Keep Calm and Vote BrExit - Last Chance to Break Free of EU Superstate - 23rd June 16
Here’s the Foreign Policy Trump and Clinton Really Want - 23rd June 16
Details Behind Semiconductor Stocks Leadership - 23rd June 16
Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - 23rd June 16
BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - 22nd June 16
Proof that the Gold Bears are Wrong - 22nd June 16
Here’s a Trillion-Dollar Investment Opportunity for Those Few with No Debt - 22nd June 16
BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - 22nd June 16
Increase In U.S. Rig Count Will Not Cap Oil Prices - 22nd June 16
Are Copper and China Stocks Set to Rally? - 22nd June 16
SPX May Break Its Trendline - 22nd June 16
Believe it or Not: More Kids Live At Home Now than Since The Great Depression - 21st June 16
EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - 21st June 16
British Pound Outlook - BREXIT, Europe and You - Does your vote matter? - 21st June 16
Fascist Victory Behind the European Union - 21st June 16
EU Referendum Opinion Polls Analysis Shows Strong Momentum in REMAINs Favour - 21st June 16
Is It Time to Dump Gold and Buy Platinum? - 21st June 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Market Volaility

A Brief History and Outline of Gold as a Precious Metal

Commodities / Gold and Silver 2013 May 28, 2013 - 03:17 PM GMT

By: Raul_I_Meijer

Commodities Pablo Paciello writes: Gold. Perhaps no other precious metal, or any metal for that matter, has been as important to the history of humanity as Gold. That's a big statement to make, given how important iron, copper, and other metals have been. So what makes Gold so special? And why have investors been flocking to it in recent years? The long history of Gold and its various properties have been essential to establishing it as the world's most important bullion metal.


You've probably heard of the term “Gold Bullion.” This refers to Gold bars, coins, and other precious metal investments. When you purchase Bullion, you physically buy and possess a precious metal. There are other ways to purchase Gold, such as buying futures, but many precious metal investors prefer to physically buy gold. There are numerous reasons as to why investors prefer investing in Gold over other assets. Many of these reasons are tied into the long history of Gold and its monetary and physical properties. So if you are looking to invest in Gold, than you should definitely take time to learn more about the Metal.

Mankind's Fascination With Gold

 
Gold has fascinated people for thousands of years, and has been an object of desire in civilizations the world over. While Gold does have some industrial applications in semi-conductors, use as filling for teeth, and other applications, humanity's primary interest in Gold stems from its appearance and use for making jewelry. While these qualities may seem superficial, they actually make Gold a highly sought after commodity that has consistently held value over time. This, in turn, made Gold the most popular monetary asset throughout history and up until the end of the Gold standard in 1971.
 
Just think, wars have been fought, lands conquered, and civilizations brought to their knees all because a particular metal happens to gleam in the light. And much of the reason why Gold holds so much value today is also due to its attractive nature. While some people may find this superficial, throughout history Gold has proven to be highly sought after by civilizations around the world due to its attractive nature.
 
Interestingly, most of the world's Gold resides at the core of the Earth, so you could literally say that the world has a “heart” of Gold. Gold is a heavy metal, so when the Earth was formed, most of it sunk to the center of the Earth. In fact, most of the Gold that resides in the Earth's crust was deposited by meteors. So far only 171,300 tonnes of Gold has been mined and many analysts now believe that most of the Gold in the crust of the Earth has been discovered and mined. This limited supply should help Gold keep its value and appreciate in the years to come. Basic economic theory states that so long as demand outstrips supply, prices will rise. The limited supply of Gold, in combination with increasing demand, should cause prices to rise.
 
Gold is sometimes referred to as Element 79 do to its position on on the periodic table.  Gold is the most malleable metal known to man and a single gram of Gold can be beaten into a 1 square meter sheet. In fact, Gold can be beaten so thin that it can become transparent! This malleability has made Gold highly useful for making jewelry and 50 percent of the world's Gold is now used for jewelry. As incomes continue to rise across the world, and especially in emerging markets, demand for jewelry should increase. This will make Gold an even more sought after commodity than it already is.
 
Gold has a melting point of 1064.18 degrees Celsius. This means your Gold rings won't melt when placed near a wood fire. Yet the melting point is low enough that charcoal furnaces can easily be brought up to the appropriate temperature to melt it. This makes Gold very easy for smiths to work with, and offers another reason why it has been historically favored for making jewelry.
 
Gold also doesn't oxide or lose its luster under normal conditions. This means your gold jewelry or bullion should look the same as it does today in another 10,000 years. Oxidization and the preservation of qualities is essential for protecting your investment. Think of it this way, the Statue of Liberty is now a bright and illustrious Green, but when it was first built in 1887, it had a color much more similar to the U.S. penny. Imagine if you pulled out went into your “Gold Vault” and found out all of your bullion had turned green? Gold's ability to withstand damage and to preserve its qualities for long periods of time is another reason why the precious metal makes such a good investment.
 
Gold is measured for its purity, in a term called Karats (also spelled Carat) and uses the symbol “K” or “Kt.” Generally speaking, the higher the purity, the higher the value. 24K gold is essentially pure Gold (99.9%), while 18 Karat gold is 18 parts Gold, 6 parts another metal. 12 Karat Gold is 12 parts Gold and 12 parts of another metal. Gold is sometimes mixed with other metals to make it more durable, though most investors prefer 24K Gold for their bullion. For one, with 24K Gold you can be certain of exactly what you are getting, and that it is pure Gold. On the other hand, if you by 18K gold, there is always a risk that you may be getting 17.5K Gold or some other slightly diluted portion. By and large, the higher the purity of Gold, the more valuable it is. If you decide to invest in Gold, we recommend that you buy 24K bullion.
 
Gold has also proven to be a great investment for many people. If you were lucky enough to have invested in Gold in 1971, before the U.S. government took the U.S. dollar off of the Gold standard, you would have probably purchased your gold for under $45 dollars per troy ounce. Now that troy ounce would be worth approximately $1,400 dollars. That's a huge return that can be matched by few stocks or other investment vehicles!
 
The long history of Gold and humanity's continuous fascination with the precious metal; combined with its valuable uses, suggests that it will be a highly sought after commodity for years to come. As a durable metal that is able to preserve its qualities over time, and a metal that is in extremely short supply, investors should feel confident that prices will rise over time. These are just some of the reasons why many investors now prefer Gold to stocks, bonds, and cash-in-hand.

Bullion Deals was established in New Zealand with the purpose of providing a superior bullion buying experience and offering the best deals in the country. Bullion Deals stocks a range of Gold and Silver bars, coins and bullion products. Visit www.bulliondeals.co.nz to find out more and to check out their range of products.

© 2013 Copyright Pablo Paciello - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife