What is Gold Used for? The History of Gold's Uses

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Contributor, Benzinga
March 20, 2023

Gold has been a symbol of wealth and power throughout human history, but have you ever stopped to consider its practical applications? This article explores the various uses of gold, both modern and historical, and how these uses impact its value as an investment.

What is Gold Used for Today?

Gold is more than just a pretty metal for jewelry and coins; it has a wide range of applications that may surprise you. Let's dive into some of the most important ways gold is used in today's world.

  1. Monetary systems and investment: Central banks and investors hold gold as a store of value and a hedge against inflation. Gold bars, coins and exchange-traded funds (ETFs) are popular investment vehicles.
  2. Jewelry: Gold has been used for jewelry since ancient times because of its luster, rarity and resistance to tarnishing. It remains the primary use of gold, accounting for around 50% of its global demand.
  3. Electronics: Gold's excellent conductivity and resistance to corrosion make it indispensable in electronics. It's used in connectors, switches and other components found in devices such as smartphones, computers and televisions.
  4. Medicine and dentistry: Gold is biocompatible and non-toxic, making it useful in medical and dental applications. Gold alloys are used in dental fillings, while gold nanoparticles show promise in targeted drug delivery and diagnostics.
  5. Aerospace: Gold's unique properties make it valuable in aerospace applications, such as in the manufacturing of satellites and space vehicles. Its radiation shielding and thermal control capabilities help protect sensitive instruments.

The History of Gold's Many Uses

Gold has captivated humanity for millennia, with its earliest known use dating back to around 4000 BCE. In ancient Egypt, gold was associated with the sun and considered divine. It was used for religious artifacts and elaborate burial goods for pharaohs.

Throughout most of written history, gold has been used as currency and a symbol of wealth.  According to a quote recorded by Herodotus, the first gold coins were minted in the Kingdom of Lydia (modern-day western Turkey) around 550 BCE, only a few years before the region was eaten whole by Cyrus the Great's monolithic Achaemenid Empire (Persia).

Persia started minting its own gold coin called the Daric (alongside a silver coin called sigloi or shekels) soon after under Darius the Great. Gold and silver were traded before this, but neither metal had yet become a near-universal measure of wealth or a cornerstone of international trade.

During the Renaissance, gold leaf was used to adorn paintings, sculptures and architecture, signifying the opulence and grandeur of the time. In the 19th century, gold rushes in California and Australia spurred massive economic growth and migration.

The adoption of gold in electronics began in the 20th century. Its excellent electrical conductivity, resistance to corrosion and malleability made it an ideal choice for electronic components. As technology advanced, gold found its way into the manufacturing of microchips, printed circuit boards (PCBs) and connectors.

In the 1960s, the invention of the metal oxide semiconductor (MOS) technology revolutionized the use of gold in integrated circuits, leading to an increased demand for the precious metal in the electronics industry.

What Influences the Price of Gold?

Several factors influence gold's price and its appeal as an investment.

  1. Supply and demand: Gold's price is impacted by its diverse range of uses. An increase in industrial and technological demand, as well as consumer demand for jewelry, can drive up the price.
  2. Market uncertainty: Gold is considered a safe-haven asset during times of economic or political instability. Investors flock to gold when the stock market or other investments seem risky, which can drive up its price.
  3. Inflation: Gold has traditionally been viewed as a hedge against inflation because its value tends to rise when the purchasing power of paper currency decreases.
  4. Interest rates: Lower interest rates make gold more attractive, as the opportunity cost of holding non-yielding assets like gold decreases compared to income-generating investments such as bonds.
  5. Central bank policies: Central banks can influence gold's price through their gold reserves and monetary policies. Buying or selling large amounts of gold can impact its price on the global market.

Understanding gold's uses and the factors that influence its price can help investors make informed decisions when considering this precious metal as part of their investment portfolio.

How to Invest in Gold and Other Precious Metals

Decided that gold or precious metals are a good buy right now? You can take advantage of a ton of great ways to start investing in all the most popular forms of precious metals. One of the best avenues to invest in these metals is through reputable precious metals dealers like Advantage Gold, Red Rock Secured, American Hartford Gold, Birch Gold Group and Augusta Precious Metals. All of these great platforms have strong reputations, support direct delivery and IRA purchases and offer a wide selection of gold, silver and platinum.

Is Now a Good Time to Buy Gold?

Gold and silver are often considered safe-haven investments in times of economic uncertainty. It doesn't always turn out that way because of confounding factors that affect supply and demand. However, because of the status that these metals have with investors, their prices can shoot up as soon as the financial markets run into turbulence.

About Henry Stater

Henry is an expert in all things crypto. He stays up to date with all the latest coins, platforms and technologies in the field. He has particular expertise in the burgeoning decentralized finance ecosystem and loves trying out all the new platforms. He also always follows major events in other financial markets and geopolitics as a whole, especially when an event’s effects ripple through the crypto market.