Gold is a personified emotional legacy; it is an essential portfolio diversification tool for an investor.
Gold is one of the rare things that have retained importance over the centuries, with value steadily rising.
The spectacular glow earned the metal names like “Tears of the sun” Aristotle believed that gold was a mixture of water and sunlight; scientifically questionable but metaphorically agreeable.
The perception of its value is almost as old as time itself; our languages have phrases like “to be worth one’s weight in gold”, “Striking gold”, “gold digger”, or the Hindi one “Khara Sona”. So what’s unique with gold?
Utilisation and Rarity
Most of the precious metal is utilised in making jewellery and gold biscuits; it is often regarded as a family inheritance.
Private investing takes the next big chunk, with central banks accounting for 17% of the stock of gold. Dentistry and technology need gold for their functioning.
The Olympic medal for the first place, Oscars, Grammy, Nobel prize, and the Golden Globe award has a gold coating.
One reason for its admiration is that it’s rare, not more than platinum or palladium. More steel is created per hour than the amount of gold extracted in all history.
If we melted down the entire above-ground stock of gold, it would form a 72 foot sided cube. So now we know it’s tough to find, and it also has specific characteristics.
It is the most malleable metal, i.e. goldsmiths can beat it into the thinnest sheets. You can spread a single ounce of the metal in a 300 Square feet area.
Gold is stable in volume due to its non-oxidative property; unlike copper and iron, it never rusts. This property is why its ancient remains are found today, and people call it ‘immortal’.
Formation of Gold and the US Bill
One reason for its value is that it is extraterrestrial. Scientists believe the Golden Metal is a result of Stellar cataclysmic explosions, basically a supernova.
When two neutron stars collided in space, they forged gold atoms together in a meteorite and crashed on earth.
After years the bubbling hot core pushed gold nuggets to the surface. These are often found in palaeolithic Caves and dates back to 40,000 years.
It also has a significant role in the economy of the world. In 1792 US Congress passed the coinage act, which established a fixed price of gold to US dollars.
Roosevelt banned possession of more than a small amount of cold at a time, and people were forced to sell their extra gold to the government.
The rationale behind this decision was the threat of instability of the prices skyrocketed, and people sold stocked gold.
There was an interesting incident in 1799 when 12-year-old Conrad Reed discovered a massive 17-pound gold nugget on his family farm in North Carolina.
This incident caused the Great US Gold Rush 50 years later, in 1849. Tens of thousands of prospectors known as the 49ers raced to San Francisco in search of riches giving a name to the San Francisco 49ers football franchise.
These gold rushes heralded the start of modern-day gold mining. The cost of any material depends on the ratio of popularity and abundance, which is not constant.
So the price of gold is not set by any organisation but is dependent on the cost of mining.
Gold as Currency
Gold was used as currency first in Turkey than in the rest of the world, and governments backed up their paper currency with gold Reserves.
The USA stopped taking the dollar to gold in 1971, and Switzerland was the final country to get rid of it in 1999, but its influence in the world economy is unquestionable.
Post pandemic, you can bet your last rupees that its price will only increase, especially scarce gold like quartz gold.
Currently, China is the biggest producer of gold, accounting for 12% of the world’s produce.
India’s exports registered a 45.17% increase in August 2020, making it $33.1 billion.
Geologists have estimated that only 55 turns to main are buried in the earth’s crust now, and at the current pace, we would run out of it sooner than we realise.
The Alchemist’s aim of turning lead to gold has certainly not been lost and remains essential even today.
Though CERN, through its particle accelerator, tried artificially mimicking nuclear reactions to produce gold, the amount was minuscule, more so considering the time and energy consumed.
It can be called a new kind of fool’s gold, or pyrite assumed to be the saviour but just a shout in the void.
So the ‘flesh of Gods, ‘ as Egyptians called it, is only set to climb the money ladder.
