Gold (Au = Aurum Lt.: Shining dawn. Stem from Aurora, the goddess of the dawn.) is a rare chemical element with the highest atomic number that exists naturally in the universe since it needs high cosmic levels of temperature and pressure that occurs in supernovas and highly dense neutron stars. According to geologists gold on earth arrived with meteorites over 2 billion years ago. Among 118 elements on the periodic table gold is the only one that is solid, durable, easy to handle and shape, rare but possible to find on all continents, non-tarnishing, non-flammable, not poisonous, not reactive nor radioactive. Pure gold is so easy to shape it is possible to mold it with bare hands.
It is not surprising that throughout history the main commodity which accepted almost everywhere was gold. Even when gold wasn’t used as a medium of exchange people always believed that gold had some sort of intrinsic value and used it for jewelleries, sacred items, magic rituals etc. and seen as a symbol of purity and royalty. For example, Aztecs used the word “teocuitatl” for gold which means “excrement of gods”.
The first usage of gold as medium of exchange is estimated to be in Ancient Egypt 3200 B.C. in forms of golden sticks. And The Lydians used golden coins which were closest to the concept of money as we understand today. Until discarding the gold standard monetary policy completely in 1971 by Nixon Shock, negotiable instruments and banknotes that represented a certain amount of gold widely used in daily life since the era of the crusades. Even though the gold standard is abandoned, central banks still store their reserves partially in gold. It is estimated that more than half of the gold that exists above ground is owned by governments or central banks. It might seem unbelievable but the US Federal Reserve Bank solely houses approximately 6.1 thousand metric tons of gold which is over 3% of the gold that humanity ever had. According to the World Gold Council all of the gold that has ever been mined by humans is slightly over 190,000 metric tons.
Today gold is priced by the global market through tradings and derivatives and used mainly for jewelry(50%) and investments(40%) but industrial applications(10%) are crucial for technologic devices and medicine too. While its conductivity andresistancy is the main reason behind industrial usage, as gold production rates are not increasing as the world economy for a century it appeals to investors when they seek safe investment harbours. Among precious metals, gold is the highest preferred option for investors.
However the general idea that gold never loses value is highly deceptive. Global supply and demand dynamics shape the gold markets like other commodities and by looking at historical charts one can easily see that there were many short and long terms that caused loss for gold investors. But it is safe to say that when a war or financial crisis approaches gold prices rise and similarly when society begins to see the light at the end of the tunnel after hard times gold prices slip.
