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Gold and its Rise
What is Gold made from?
Gold is a chemical element. It is soft and dense metal with a bright yellow colour that does not tarnish in water.
The symbol for gold is AU and the atomic number for it is 79. Gold is the least reacitve element and it is solid under normal conditions.
Gold is found in free elemental form which is in rocks and alluvial deposits.
The chemical element can be dissolved by nitro - hydrochloric acid, cyanide and mercury.
This metal is precious and is sort after for jewellery, coinage and art.
Before war from 1932, gold was used as a medium of exchange.
The Value of Gold
For years gold was used as a monetary exchange but was stopped by the International Monetary fund, which started in 1971 where the world leaders abandoned the idea of gold exchange and wanted to have real currency. Switzerland was the last country to change and joined the monetary fund in 1999.
Central banks do however keep liquid reserves as gold and you can buy gold coins for investment purposes.
Foreign exchange and the growth of economies has made gold a declining investment and fixed exchange rates for gold has become floating prices.
Gold is measured in carats and 24 is the purest.
Platinum prices are higher than gold at times but gold is the most sort after metal.
Investors in gold store it in the form of bullion coins or bars to save themselves from inflation rates.
The American gold Eagle, the British gold Sovereign and the Krugerrand is 22k. The Canadian gold maple leaf contains the highest purity of gold in any bullion coin as well as the American buffalo, Australian gold Kangaroos and the Austrian Philharmonic bullion which are all at 99.999%
Gold has always been seen to be the signature for wealth and it started with kings and queens.
Today gold is still popular and is in competition with platinum, however, gold is the most classic of metals.
What Gold is Used For
There are many uses for gold and that is why it is the most sort after metal. Jewellery made with gold is mixed with copper to make it stronger but the softest form of gold is 24k and is bright yellow in colour. The purest form is fragile and can break easily which is why most people invest in 18k.
Anything under 24k, is not in its purest form and has to be mixed with copper in order to keep it strong. 18k gold consists of 25% copper.
White 18k gold consists of nickel, zinc and copper. It has a silvery appearance and nickel is toxic.
Palladium alloys can be used instead of nickel but it is more expensive.
Gold is also used for medicinal purposes and in the ancient times they thought that if you had gold, it had to be healthy.
Gold salt is used to for anti - inflammatory purposes and it does just that. Many pharmacists use it to help with arthritis and gold injections are said to help with tuberculosis.
Only the salts can be used for the body as the element itself cannot effect the body at all.
Alloys of gold are used by dentists for bridges and crowns and it is more effective than the porcelain crowns. In many cultures gold crowns are a must and it has been a trend for many now, to have gold teeth as a sign of wealth.
Gold also has a high electric conductivity and is used as a conductor.
A certain type of gold is used in nuclear medicine, cancer and other diseases for treatment.
The beautiful element is used for very expensive facials and in Dubai, where there is an ice- cream that you can order with edible gold flakes in it.
What gold do you wear?
How to Invest in Gold
There are many ways to invest in gold and one of the most popular ways is to buy bullion coins as it is the most direct exposure to the physical asset. It is an asset and when buying coins or bullion's you need to look at the transaction fees and secure storage for the gold. Costs for keeping them is very high.
You can buy and sell gold on the stock exchange and the CME matches and settles all metal trades, guaranteeing credit worthiness. Costs are also a factor and they can get very high. You need to do your homework and research before buying and trading on the stock exchange.
Investing in a mining company is also a great way to make money from gold but the costs change and vary. Buying or investing in mining creates high risk as costs increase and decrease as well as management issues, which could effect the gold productivity. If there is a problem with the mining company and staff, then the price of gold will rise and fall.
Investing in the stock market is risky but you do not have liquid assets to store and the costs are not as high. There is also a risk in doing this as investing in something that you cannot physically see, can be dangerous.
The best way to invest in gold is to buy coins like the Krugerrands and bullions but you need to do your research first.
Investing in gold bullion coins is a safe way to invest.
Gold mining is still done today but investing in a mine itself is a risky thing to do.
Gold increases and decreases on the stock exchange regularly a it depends on how the mines are run, producing and if there is no staff strikes at the time. When investing on the stock exchange, you need to research how the gold companies are run and if there are going to be strikes at any time before you buy or sell your stocks.
There are many uses for gold; jewellery, dentistry, electrical components and investment.
How and Where is Gold Mined?
Gold is found near the core of the earth and the first miners were able to find gold nuggets in the rivers. This happens due to a volcanic eruption and mining out of the river is called "panning for gold."
Open cut mines are what they use today and gold can be found a kilometre from the surface. Deep mines are also used to get 20 or 30 kilometres below the surface towards the core where they work underground.
South Africa was the largest producer of gold for many years and it started off in Pilgrims Rest in the Eastern Transvaal. You can still go there today and stay in the old mining town which has been left almost the exact way it was during the time of the settlers.
Gold Reef City in Johannesburg, is also a great place to go as you can go down into a mine shaft and watch how mining is done. They also have gold bars available for you to see and if you can pick it up then you can take it home!
China, United States, Russia and Peru took over from South Africa as mining producers.
Gold Reef City
South Africa has many mines that are still active today but you can go to Gold Reef City to see how mining is done.
You are allowed to do a tour underground where you get into a mine shaft and you are given a hard hat and a torch. It is very dark and not for the feint hearted.
Miners used to stay down for hours with a picaxe and a torch. The dust from mining caused many of the miners to get sick and many got breathing problems later on in life.
Gold Reef City is fun and interesting to see how it used to be done years ago.