The applications of gold

Applications of gold
Since the 20th century, gold has been practically indispensable in industry. Some applications are:

High-quality electrical switches and connectors.
In aerospace as a coating for satellites because gold reflects ultraviolet radiation well.
Because of its high density, as weight in a self-winding watch, in the higher price range.

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Gold is used in many electronic components.

The radioactive isotope 195Au is used in cancer research.
Crowns in dentistry.

Although it is often replaced by other metals, in some monetary systems gold is (still) used for coins.
To cover paper money (silver is also used).
The beautiful shine and good corrosion resistance make gold a popular metal for jewellery.
Because of its lustre and scarcity, gold is a symbol of wealth. Household objects were therefore sometimes made of gold or gilded. The same was true for works of art.

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Embroidery (brocade) with gold thread, actually tangent metal.
In the past, art and utensils such as clocks and candlesticks were gilded by blowing vapours of gold dissolved in mercury (amalgam) on the object, whereby the mercury evaporated and the gold was deposited in a thin layer. This is no longer permitted due to the severe toxicity of these fumes.

Approximately half of the gold is used in jewellery and only 10% is used for industrial purposes. As a pure metal, gold is virtually unusable for industrial applications because it is very soft. Instead, it is widely used in alloys because the element has excellent electrical properties and is highly corrosion resistant.

Gold as an investment
Many investors use gold as an investment and about one-third of the gold is set aside for this purpose each year. Finally, central banks buy about one-tenth of the gold on offer each year and put it in the vaults. India and the People’s Republic of China are the largest buyers of gold.

Because gold is stable in value, the demand for gold increases when the economy is in crisis and other investments are seen as risky. As a result, the price of gold rises in times of economic uncertainty, as people in the financial world also say that ‘gold loves instability’. When the economy improves, investors sell their gold again to return to other investments that offer a better return and of which the risk is again within limits, and the price of gold drops again. There is therefore a gold cycle that runs in the opposite direction to the economic cycle.

Consumption of gold
There are several drinks in which gold is used. This concerns 24-karat gold leaf.

Gold liqueur:
Bridal tears
Danziger Goldwasser
Goldstrike

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sake: Kimpun Sake
wine: Luxor champagne
There are also chocolates for sale, in which gold leaf is used. In some restaurants gold leaf is added to dishes such as desserts.
Gold is known as a food colouring agent under the E-number E175.
Price development

Gold bar of 1 kg
Until mid 1971 gold played a crucial role in the international financial system. The value of the currency was directly or indirectly expressed in gold and the central bankers determined the price of the gold. The price of gold was very stable for decades. The American president Richard Nixon put an end to this on August 15, 1971, his measure is still known as the Nixon shock. After the Nixon shock, the price of gold is a matter of supply and demand. On the international commodity markets, the price of gold is expressed in American dollars per troy ounce, which is just over 31.1 grams. In 1980 the price of gold reached a record of 887 dollars per troy ounce. In 2011 the price of gold reached a new nominal record of $1900 per troy ounce, corrected for inflation this was still slightly lower than the old record.

Since the 1980 summit, gold has been in a so-called bear market. After the high inflation of the late seventies and early eighties, the price of gold rose to a record high of US$887 per ounce. After this, the price of gold dropped to a low of US$254 per ounce in 2001, before starting an unprecedented climb. This climb is due to the fact that worldwide it became clear to the large investors and economists that the United States was engaging in deep debt and financed it through its own currency through the Federal Reserve (FED). The euro crisis has reinforced the recourse. This shows that there is a resort to physical gold. Investment gold is supplied in coins, such as the Kruger ring, or in bar form. Nowadays it is also possible to invest in Gold exchange-traded funds (GETF).