Gold Uses

 



Gold is an ancient metal of wealth, commerce and beauty, but it also has a number of unique properties that make it invaluable to industy. These properties include:

• Resistance to corrosion
• Electrical conductivity
• Ductility and malleability
• Infrared (heat) reflectivity
• Thermal conductivity

Gold’s superior electrical conductivity, malleability, and resistance to corrosion have made it vital in components used in a wide range of electronic products and equipment, including computers, telephones, cellular phones, and home appliances.
Gold has extraordinarily high reflective powers that are relied upon in the shielding that protects spacecrafts and satellites from solar radiation and in industrial and medical lasers that use gold-coated reflectors to focus light energy. And because gold is biologically inactive, it has become a vital tool for medical research and is even used in the direct treatment of arthritis and other intractable diseases.
The demand for gold in industry is steady and growing. The supply of gold from stored inventory and from mining operations is limited and will remain so. Demand from investors who want to posses this precious metal is steady, and increases during periods of world crises or instability. The result is a market with much more upside potential than down.
Gold is an excellent hedge against inflation, and protects earnings for the future. Modern investors can invest in gold the traditional way — by purchasing gold bullion in the form of bars or coins — or they can trade in gold or gold futures electronically, or by investing in gold mining or refining companies.

World Uses Of Gold 

Gold's Usefulness as safe haven:
The geo-political and world economic structure is currently undergoing major change-some have even called the situation an "upheaval." This means that the investment outlook, particularly for certain parts of the world, is more unpredictable than usual. Under these circumstances, it is logical to conclude that certain investment portfolios should include real (non-paper) assets such as commodities for protection against a potential decline in the paper markets.

Gold's Usefulness as an Asset Diversifier:
Most portfolios are invested primarily in traditional financial assets such as stocks, bonds and mutual funds. Adding gold to a portfolio introduces an entirely different asset; a tangible or real asset, thus increasing the portfolio's degree of diversification. The purpose of diversification is to protect the total portfolio against fluctuations in the value of any one asset or type of asset. Gold does exactly that.

The reason is basic: 
The economic forces which determine the price of gold are different from, and in many cases opposed to, the forces which determine the prices of most financial assets. The price of an equity depends on the earnings and growth potential of the company it represents. Likewise, the price of a bond depends on its safety, its yield, and the yields of competing fixed income investments.

The price of gold, on the other hand, depends on different factors:
Worldwide physical supply and demand for gold, movements in foreign exchange rates, inflation, interest rates and political turmoil. The effects of all these factors are somewhat complex and variable. But the important point to remember is simply that they cause the price of gold to move independently of the prices of financial assets.