Gold - Commodities

Introduction

Gold (from the Latin aurum, "shining") is a bright, hard, ductile and malleable yellow transition metal that does not react with most chemicals. At room temperature, it presents itself as a solid.

Gold is one of the most traditional investments in the world and stands out mainly for offering security and liquidity. It is estimated that more than half of the world's gold production is used for this purpose. The investment in gold can be an excellent option for those who expect a medium to long-term return and want to diversify investments, protect (hedge) assets or reduce losses from market volatility.

Other economic applications of this commodity are limited to their use as raw materials for the aerospace and electronics industries as well as dentistry and jewelry.

The yellow metal is typically considered a haven for investors in times of uncertainty, it can be used as a widely accepted store of value when investors lose confidence in other commodities on the stock market and foreign exchange market.

Characteristics

Gold is a bright transition metal, yellow, dense, malleable, ductile (trivalent and univalent) and does not react with most chemicals, but is sensitive to chlorine and bromine. At room temperature, it is a solid. This metal is usually found in pure or nugget form and alluvial deposits. It is one of the metals traditionally used to coin money.

It is easily manageable and malleable that with only one gram of gold, it is possible to obtain a wire of 3 kilometers in length and 0.005 millimeters in diameter, or a square blade of 70cm width and thickness of 0.1 micrometer. Pure gold is too soft to be used in many applications. For this reason, it is generally a hardened alloy, mixed with silver and copper.

History

Archaeologists suggest that the first use of gold began with the first civilizations in the Middle East. It may have been the first metal used by mankind. The oldest artifact in gold was found in the tomb of Egyptian Queen Zer.

Discovered in Sumer, Egypt are Egyptian hieroglyphics 2600 BC describing the metal, which is referred to in various passages in the Old Testament. It is regarded as one of the most precious metals, and its value was used as the standard for many currencies throughout history.

Despite being used as currency since 3,000 BC, gold gained universal currency status in the late eighteenth century. Most of the gold produced worldwide is absorbed by the United States, who use it as coinage and especially for bank reserves and balancing of collateral in international business transactions.

Utilities

Gold performs critical functions in computers, communications, spacecraft, aviation engines, and many other products.

It's high electrical conductivity and oxidation resistance have enabled widespread use in electrodeposition, or to cover surfaces of electrical connections with a gold layer. The same process can be used for gilding parts, increasing their beauty and value. Like silver, gold can form amalgams with mercury that are sometimes used in dental restorations.

Markets

The gold market is part of the group of so-called risk markets as their prices vary according to supply and demand. In the international market, the global benchmark for gold trading is the New York Commodity Exchange (COMEX), in which it negotiates future contracts of this commodity.

Gold prices in this market are based in relation to the troy ounce, equivalent to 31.104 grams.