Why is Gold so Valuable?

Why is gold so valuable?

Gold is the most sought after mineral in the world!.  Diamond is the second most sought after mineral in the world.

What is gold used for?
Gold is primarily used for jewelry, plating for electrical connections, and a financial commodity to store of value independent of fiat currencies.

Why is understanding Gold important?

If you are interested in history, sociology, economics, art, fashion, science, literature, investments, speculation; gold has has something interesting to learn. Gold has played a major role in our history, economics, culture, science for quite a long time. The properties of gold simple and unique.  However, understanding  the fascination power and symbolism can be bit complex.

Gold is currently worn, adored, stored, hoarded and speculating on everyday.  It is being stored in Fort Knox in New York and mined everyday in remote places in the world. Gold inspires passion, pain, blood, birth, celebration, love and death.

In 1821 Britain gold as the single monetary standard. Gold has backed currencies paid off debts and been accepted as a form of payment for over 3,000 years.

Gold is fun because it’s can be used to create beautiful works or art to wear and admire.  It can also be fun for the investor and speculator to attempt to make money on it.

In simplest terms, gold is valuable because it is enduring.  Gold is practically indestructible. You can hammer gold, you can drop in the ocean for 1,000 years, and it will endure.  It has resistance to water, salt, and air.

Every since gold has been discover more than 7,000 years ago, gold has been a part of human culture to represent beauty and wealth.  Gold has remarkable qualities which is the reason it’s used for jewelry.

Because of gold’s rarity, beauty, history, symbolism, and natural properties; gold is used for industry, investment and especially for jewelry.

Gold a metal or a mineral? 

Gold is both a metal and a mineral.  It's name means yellow in Anglos Saxon.

About 2,000 minerals have been found. Gold is composed of a single element which is AU, which is aurum in latin and has a rich yellow color.

Mineral is a building block of rocks.  Minerals are found in the earth and is not made by man. Mineral is inorganic and are not alive like plants or animals.  Coal is not a mineral as it is decayed plants and animals. Minerals are a chemical substance and some minerals are made of only one element like gold or silver while some like quartz are a combination of minerals. Minerals will always have the same chemical composition.  

Gold Mining

 
Gold mining is the extracting of gold from the ground.  There are several methods, techniques and processes which gold is mined from the earth.  It’s impossible to know when gold was found but estimates are about 7,000 years.

Gold in it’s native form are in nuggets, grains of rocks, in veins, and in alluvial deposits.

Scientific Facts of Gold

 
Gold has the atomic symbol Au and the atomic number 79. It is very dense, but can be easily combined in alloys.

Pure gold is a yellow, lusterous, dense, malleable, ductile, soft, and resist oxidation from air and water.  However, the metal can resist attacks from individual acids but dissolves in certain mixtures of acids. The substance melts at 1065.18 degrees Celsius. The element fairs very well in environments of air, moisture, corrosive agents, or other chemical forces.

The price of gold is decided by purity and its weight. Pure gold, also known as 24K gold, is very malleable and ductile. However, when it is made into an alloy, whether 18K (75% gold) or 14K (58.3% gold), it is more durable and practical for everyday use.

Properties of Gold
Scientifically, the properties of gold make it a practical material, allowing it to be used for many high-end goods. Gold has strong corrosion resistance, only harmed by nitric and hydrochloric acid. With high conductivity combined with its durability, people choose gold over copper and silver for some electronic parts. Lastly, its malleability and ductility allow it to be transformed into a variety of shapes and forms. These properties make gold extremely useful for both industrial and luxury use. Gold has uses scattered across unrelated fields, showing the versatility of the metal as well.

What is gold used for?
Gold is a standard of international currency and is widely used as jewelry, electronics, dentistry,  plating for electrical connections, and a financial commodity to store of value independent of fiat currencies.  

How to Refine Gold

Creating consumer-ready gold is a process that involves three steps: prospecting, extracting, and then refining gold.

One of the most difficult phases of creating processed gold is finding it. There are a variety of ways to find gold, such as gold panning, metal detecting, sluicing, dredging, and mining. Panning for gold is easiest, but mining is the most practical for large-scale production. With mining, geologists search for of gold in rocks and soil. If there are indications of gold, scientists drill samples, take them to the lab, and analyze their gold content. Next, if samples turn out positive, miners will take some of that rock from the ground. They now need to isolate it and refine it into actual gold. First, the large chunks of rock are broken down into smaller pieces by crushers. Once the ore becomes a powder, it is put into water to form a pulp. This liquid runs through a leaching tank, which dissolves the gold out of the ore through the use of chemicals. (Usually, cyanide is the most common solvent used.) Then comes a filter, which prevents the pulp from passing but allows the dissolved gold to go through. The last procedure called electro-winning delivers an electric current to the liquid to remove any last leaching chemicals. Later, gold is melted into chunks and is shipped off to other refineries for better processing.

Refining gold is the last stage of gold production. It removes impurities that may be left in the gold. First, gold must be completely melted, which usually happens at 1102 degrees Celsius. Once everything is melted, borax and soda ash are added. Next, the liquid gold is poured into a mold and is left to settle, where the larger impurities settle on the top, and the dense gold sinks to the bottom. Once everything hardens, the gold would form the bottom layer of the molded substance. It can then be broken off from the rest of the impurities. Later, the gold might need to be remelted and purified once again.

How can you invest in gold?
You can buy physical gold or own gold through paper documents (shares and certificates).

Investing in Gold is like any other investment in which investors must recognize from the start that things may not turn out how they expect.  Investing in gold in the future does not look like it will go away.  The one main advantage about investing in gold is that it has not gone down to zero. This is not to say that is will not be volatile and go down but it not likely to be worthless or go bankrupt on you like a stock or a company.

Advantages of Investing in Gold

One of the advantages of gold is that it is easy to liquidate.  It is the most liquidable hassle free physical assets to liquidate in the world.  Prices can be checked with ease via the Internet and calculated with precision.

Disadvantages of investing in gold

Although gold investment does have profits, there are also some inconveniences that come with it. Investing in an actual piece of gold, either as a coin or a bullion, is subject to hidden costs of buying and selling. When a gold coin is bought or sold, mandatory fees must be paid. Furthermore, the owner must find a safe location to store the gold, whether in a safe or a safety deposit box at the bank. Without a secure location, it is possible that anyone might steal the gold. Unlike gold stocks or bonds, gold certainly can be misplaced or taken by a burglar or thief. Lastly, there is a possibility of gold rates lowering. Gold, like all investments, can take a downturn depending on complicating factors in the global economy.

Ways of Investing in Gold

There are a number of methods to invest in gold. Such as actual pieces of gold in the for of coins, bullion, jewelry.  You can also invest in indexes or gold stocks.

For convenience, gold indexes and stocks are great!  Gold stocks are easy to buy and easy to sell. For adornment and profit potential; rare gold coins and jewelry have great potential but also great pitfalls.

People may not consider buying gold stocks, as it is directly correlated to the price of actual gold. As gold prices continue to increase, so will the stocks, sometimes even more so.

Personally, I think that gold stocks are the most convenient method to invest. The price of gold stocks are related to the price of actual gold. When gold prices are high, gold stock indexes rise, sometimes double the amount of gold depending on the stock. Furthermore, with stocks, you avoid any hidden costs. It is simple to buy and sell stocks at any moment and at any price since you do not need to find a buyer. Buying stocks has all the benefits of buying actual gold, but it is easier to facilitate a transaction. For an investor with little experience in the field of gold, buying gold stocks is less of a hassle yet the most profitable way make money.

Best way to Invest in gold

There isn’t a best way to invest in gold.  It’s more a less of a personal choice. I prefer to invest in gold via jewelry as I have advantages for selling it for profit potential for the design.

When buying any gold coin, there is a transaction fee that is also attached. This may be 3 to 5%, depending on the seller. Purchasing a Canadian Maple Leaf coin usually has the least hidden costs, although other sales would certainly have them. These prices become burdensome, especially if purchasing a large number of coins. However, some people prefer purchasing coins because of the emotional attachment to them. Instead of having a symbol of gold possession, such as a stock certificate or gold bond, the owner actually possesses the real gold coin.

Furthermore, other coins available are collectors items, so they may be worth even more than just its weight. In these instances, the convenience fee is very little in respect to their initial reason for purchasing a coin.

Personally, stocks are the most convenient method to earn profit from gold. The price of gold stocks are related to the price of actual gold. When gold prices are high, gold stock indexes rise, sometimes double the amount of gold depending on the stock. Furthermore, with stocks, you avoid any hidden costs. It is simple to buy and sell stocks at any moment and at any price since you do not need to find a buyer. Buying stocks has all the benefits of buying actual gold, but it is easier to facilitate a transaction. For an investor with little experience in the field of gold, buying gold stocks is less of a hassle yet the most profitable way make money.

Conclusion
Overall, all investors should primarily understand the pros and cons of gold investment before becoming involved in an unknown situation. Without understanding the fluctuation of gold, one would only be putting himself or herself into a risky investment. Gold certainly can face decreases in price, and the market can even lower without any signs. However, this sort of risk factor is applicable to all investments. Gold will not become a 0% investment, and it will never become negative.