Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Elliott Wave Theory: Is Elliott’s Theory Enough? - 27th Apr 17
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17
Can Marine Le Pen Win? French Presidential Election Forecast 2017 - 21st Apr 17
Why Stock Market Investors May Soon Be In For A Rude Awakening - 21st Apr 17
Median US Household’s Wealth Has Declined by 40% Since 2007 - 21st Apr 17
Silver, Platinum and Palladium as Investments – Research Shows Diversification Benefit - 21st Apr 17
U.S. Stock Market and Gold, Post Tomahawks and MOAB - 21st Apr 17
An In Depth Look at the Precious Metals Complex - 20th Apr 17
The Real Story of China’s Strong First-Quarter Growth - 20th Apr 17
3 Types Of Life-Changing Crisis That Make You Wish You Had Some Gold - 20th Apr 17
The Truth is a Dangerous Thing - 20th Apr 17
2 Choke Points That Threaten Oil Trade Between Persian Gulf And East Asia - 20th Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

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