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Gold worshipped since ancient times
Published: 12-08-2013 00:00
Since ancient times, gold has been worshipped by our ancestors. The reason for its long history is its intrinsic properties and its nature. In this article, BullionStar takes a closer look at how this precious metal managed to retain its universal appeal and withstood the test of time.
The value of gold, like any other precious metal, is governed by the theory of supply and demand. In fact, gold is very difficult to mine and refine. Not many people realise that a lot of resources are required to produce one gram of gold from its ore. The valuable characteristics of gold however makes it economically feasible to mine 1-2 grams per tonne. Higher prices would make it economically viable for the mining companies to mine ore for even lower grades.
Unique physical properties
Gold is extremely malleable and ductile. Because of this, it can be manufactured into thin transparent sheets. Gold is for example commonly used as part of an anti-icing material in some aircraft cockpit windows. The heat produced by the resistance of the gold is used to prevent ice forming on the cockpit windows. In addition, gold is highly reflective and is a good conductor of electricity. Because of this, it is widely used in different electronic equipment, especially computers. Gold is e.g. used in computer motherboards.
Besides its vast industrial applications, gold is commonly used to fabricate jewellery and medals primarily because of its shiny yellow appearance. Compared to other precious metals like silver and platinum, gold is historically the most sought after due to its unique shiny surface. Even prestigious sports events, like the Olympic Games, award first place sportsmen with gold medals, not silver or platinum. In Asia, people use jewellery as a form of adornment and also as a form of holding to be passed on to future generations. In China and India, gold jewellery is part of the bride’s dowry.
Store of value
Historically, gold has been used as money. This was because of gold’s ability to store value, especially during turbulent times and economic uncertainty. For thousands of years, gold has retained its value, even when all other investments such as currencies, stocks and real estate lose theirs. Because of its ability to store value, gold is seen as an effective hedge against inflation. During times of rising inflation, gold will rise in value as currencies depreciate in value. This is due to the fact that currencies have no intrinsic value and governments can print unlimited amount of currencies to fund their national debts. Nonetheless, when they do so, the purchasing power of their currencies will decrease and inflation will shoot up. Gold has limited supply, so governments cannot manipulate it like currencies.
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