While gold is important for industry and the arts, it also maintains a unique status among all commodities as a long-term store of value. Until recently, it was considered essentially a monetary metal, and most of the ingots produced each year were destined for the vaults of government treasuries or central banks. The metal gold, with atomic number 79 and symbol 'Au', is one of the oldest metals used by humans. Its aesthetic and physical properties have made it one of the most valuable metals in the world.
Basic gold is very malleable and ductile, resists corrosion or oxidation and is almost always found in pure form. These properties ensured their application in many industries, but none as much as in jewelry. Between 50 and 60% of new gold is used for ornamental purposes, a third is used for investment purposes and the rest for industries. The largest gold deposits are found in South Africa, where about 60% of all new gold originates.
Australia, the United States and Russia are other important producers. It is estimated that all the gold mined throughout human history is currently equivalent to a cube of about 20 meters in volume per side. Gold has been the cause of conflicts, wars, explorations and adventures throughout history. Okay, gold is not a cash-generating asset.
So, like metal, it must be a commodity, right? Well, that's true, but only in part. Gold has some industrial utility, that's for sure. However, the demand for technology is limited. According to data from the World Gold Council, it only represents about 17.5 percent of total demand for gold.
However, we know that the demand for gold is actually much higher, since the WGC focuses on annual flows and ignores huge gold stocks and the fact that demand and supply for gold come from marginal buyers and sellers who accumulate a large number of ingots. Therefore, gold is a commodity only in a tiny part; this implies that we cannot value it as copper, simply considering the annual balance between production and consumption. While gold is generally found in its pure state, it can also be extracted from silver, copper, lead, and zinc. Gold and silver, and sometimes other precious metals, are often considered to be hedging against inflation and economic downturn.
A pleasure deposit is a place where a natural phenomenon has “placed” nuggets and grains of gold over a period of time. Since gold is practically indestructible and there are already substantial quantities of it stored on the surface, its supply and demand characteristics are different from those of industrial metals. However, production has not grown in relation to the growth of the world's economies, so the world's gold reserves have become only a small fraction of the representation of money. The peoples of Central America and the upper part of South America considered gold literally to be the product of the gods, but in North America people lacked these opinions and valued related objects for their usefulness.
So is it practically useless or, at best, is it a collector's item? Undoubtedly, some gold investment products may have aesthetic or emotional value (think grandmother's jewelry or some rare coins). Gold has been known and used since the Copper Age and artifacts have been found dating back to the 5th millennium BC. The comparison between the four basic types of investment with reference to gold is presented in the table below.