There are 92 naturally occurring elements on earth. Only eight of these are known as noble metals because they are unreactive with air and do not tarnish or corrode. They are effectively immortal. Four of these noble metals became used as commodities – gold, silver, platinum and palladium. Of the four, gold is the rarest on earth.
On average, when gold-containing rock is mined, one ton needs to be processed to produce 1 gram of gold. The tiniest flecks of gold mined by ancient man in lands long forgotten are still here today. Pure, beautiful and valuable. Many systems of money and debt have come and gone but gold has always remained. The allure of gold is enduring.
It is the single most successful store of value in the entire history of mankind.
Do you know which of the following are true for Gold?
- Gold is a chemical element with the symbol Au. This is from the Latin word aurum, which means “glowing dawn”.
- It has the atomic number 79.
- It is soft, malleable and ductile. One ounce of gold can be drawn into 80 kilometers (50 miles) of thin gold wire.
- Gold’s purity is measured in karats. Pure gold is described as 24 karats.
- It is mixed with other metals (alloyed) to make it harder (for example 18 karats is 75% gold).
- One ton of pure gold is only the size of a one-foot square cube.
- It does not oxidise or corrode.
- Melting point 1,064C : Boiling point 2,857C.
That’s right, all of the above. Gold is a truly remarkable metal.
So why own gold?
Gold was used by almost all the major civilizations in the world for thousands of years. The combination of all the factors listed above means that gold is almost indestructible. Gold objects produced around 4400 BC by the ancient Thracian civilization are still perfect and intact today. These were discovered at a burial site in Varna, Bulgaria. Very few assets and no paper currencies have ever lasted this long. Gold is the ultimate store of value and medium of exchange.
Our world today is complex and rather unstable. War and turmoil seem to be growing. Global debt has reached astonishing levels and the banking system appears fragile and likely to fail. We all need a means to secure our wealth. We need something that governments and corporates cannot manipulate. We need a proven, universal store of wealth.
Our wish list for the ultimate store of wealth
Portable and highly liquid.
The ultimate hedge against inflation.
A universal currency.
Can never default.
Cannot be produced or printed.
Easy to store.
Only has one grade.
Recognised across the world.
Purity is easily tested at almost zero cost.