What Is Gold Used For?

Gold is one of the most sought-after and trusted commodities. Even the term “gold standard” refers to a standard that is unquestioned or above reproach. Gold has motivated pirates, treasure hunters, and conquistadors throughout the centuries.

There are many uses of gold in the modern world, from practical to purely symbolic. As a limited resource, gold retains its value.

These two qualities undergird gold’s status as an inflation hedge and an investment that will survive economic downturns, wars, and societal collapse.

As you consider investing in gold, consider the following uses, and take stock of the many ways that people today depend on gold.

Your investment in gold is more than just a piece of paper or a collection of bits in a computer somewhere. People value gold for its intrinsic properties.

What Are the Historical Uses of Gold and Gold Alloys?

Nations have used gold as a medium of exchange for more than 2,500 years. According to the World Gold Council, the famed King Croesus of Lydia was the first to use gold as a currency.

His practice of minting coins, first using the gold alloy electrum and later pure gold, spread to the Persians and then across the world.

How Is Gold Used Today?

gold earrings at top of white satin

Gold Jewelry

Gold jewelry and ornamentation predate gold usage in currency by thousands of years because the metal is easy to work with and does not tarnish.

The tradition of using gold for jewelry continues today in broaches, wedding rings, earrings, necklaces, and more.

Alloys of gold feature prominently in modern jewelry for many reasons. Adding another metal to gold widens the range of colors that gold can have.

Some alloys can be stronger than pure gold and typically cost less due to gold’s high intrinsic value.

White Gold

White gold consists of gold and non-precious metal. This alloy boasts many of the desirable qualities of gold but has a lighter appearance that resembles platinum, a more valuable metal.

Rose Gold

Rose gold is an alloy of gold and copper, with an attractive light red or pinkish hue.

Gold Bars for Currency Reserves

In the past few centuries, paper money began to replace gold and silver for larger currency denominations, and gold provided the financial backing for these currencies.

Many nations restricted the sale and ownership of gold and retained gold reserves, ostensibly to allow bearers to redeem paper currency for gold upon demand.

The United States backed its currency with gold until 1933. Although gold no longer supports the US dollar, the United States still maintains a gold reserve, as do many other countries.

Gold for Medals and Statues

excited athlete biting her gold medal

A “gold medal” is synonymous with the highest level of achievement. There is no better way to recognize and commemorate milestones in athletics, scholarship, arts, and other competitive endeavors than a gold award.

While many awards might be gold-plated, solid gold or gold alloy is ideal for truly noteworthy accomplishments that do not tarnish with time.

Gold also symbolizes luxury and elite status. Gold appears on the uniforms for staff at upscale establishments, insignia on military uniforms, and the fashion accessories of celebrities and entrepreneurs looking to show off their success.

Gold represents the epitome of conspicuous consumption all over the world.

Gold Alloys for Currency

Many nations around the world mint gold coins. The coins have artistic value and often depict national symbols. However, the amount of gold they contain typically determines their value as a gold investment.

If the coin is in pristine condition, has a minting error, or is remarkable in some other way, collectors might pay a higher price for it.

Gold Alloys for Dentistry and Medicine

Dental fillings

Currency and ornamentation aren’t the only uses of gold. Many people choose gold fillings for their teeth, although they can use other materials. Gold does not match the color of natural teeth as well as porcelain and ceramic, but individuals might choose gold for fillings and false teeth.

  • They represent wealth.
  • They are durable and resist corrosion.
  • They do not contain mercury.
  • Gold false teeth could complement gold jewelry and other fashion accessories.

Surgical Instruments

gold plated surgical scissors beside other instruments

Some surgical instruments and metal parts for medical devices contain gold plating to prevent corrosion.

In addition to gold’s general advantages in the construction of electronic devices, gold plating allows for other benefits specific to medicine, such as

  • The ability to block x-rays, allowing implants to show up against a background of soft tissue
  • The ability to conduct heat well to start at average body temperature
  • A resistance to rejection by body tissues because gold is inert

Advanced prostheses and implants are becoming more prevalent in medicine, further increasing the need for a supply of gold.

Gold for Electronics

Gold is a highly efficient conductor of electricity, and its malleability makes it useful as a material for constructing electric circuits.

Gold often appears at the junctions between circuits on computer motherboards and the wires that connect to them. The gold allows electrical signals to enter and exit the chip without exposing the wire to corrosion.

The increased demand for electronics is likely to continue supporting the demand for gold and other precious metals even if the desire for jewelry and gold bullion stays constant.

In the years ahead, more household and automotive devices will become “smart,” meaning they will have integrated computer technology. All of that computer technology will require more and more gold.

Gold Bars and Coins for Investment

Private ownership of gold has benefitted investment portfolios for decades. For instance, in the wake of the Great Depression, many people distrusted banks and sought to keep their money as tangible assets that they could lock away or hide under their mattresses.

The FDIC protects bank deposits in the United States against bank runs, but even cash deposits in bank accounts are vulnerable to inflation.

In the early 2020s, as inflationary pressures and commodity shortages continue to force prices higher in the global economy, people are often reluctant to leave their money in bank accounts. Still, they do not trust stocks or cryptocurrencies either.

Durability and malleability prove to be essential features for many uses of gold, including its use as an investment vehicle.

Its resistance to rusting and tarnishing means that you do not need to protect it from the environment as much as you would a less valuable metal like silver or copper. The malleability makes it easier to mark the gold with its purity and provenance.

Investors often buy physical gold coins and bars. Although they must be physically stored and protected, unlike stocks and mutual funds, investing in physical gold has its advantages, including the following:

  • Gold coins have a well-known value that makes buying and selling them easier.
  • Only authorized dealers can buy gold directly from the US government, so you have a trusted partner if you buy from them.
  • Investors can take pride in owning coins representing their country, commemorating important events, and having particular meaning.
  • Investors in physical gold could potentially sell certain coins to coin collectors at values higher than the metal value.

Investing in Gold

gold coins with money saving chart

You can invest in gold in many ways, including:

These and other precious metal investment strategies have their strengths and weaknesses. Jewelry can have a value higher than the gold content by weight because of the value of the artistry or the fame or status of the original goldsmith.

However, gold artwork could decline in value if it suffers damage, if the artist becomes unpopular, or if the piece is a forgery.

Investing in gold bullion (gold bars and gold coins) is more straightforward since dealers often stamp the weight and purity of gold bars on the bar itself.

Gold coins also have known weights, making it easy for you to calculate the value of your gold investment. Multiply the weight of the gold piece and multiply that by the current spot price for gold.

Learn About Gold

Now that you have learned about the history and uses of gold throughout the ancient and modern world, consider adding gold and other precious metals to your investment portfolio with Learn About Gold.

We can connect you to a Gold IRA partner who will introduce you to gold individual retirement accounts (IRAs) that make the most of gold’s intrinsic value.

Don’t wait for gold prices to rise even higher. Take the time now to learn the fundamentals of investing in gold so that you can make gold investment part of your plan for your future.

Use the contact form on our website to take the first step in precious metal investing today. Visit our blog for company reviews, information on the gold market, investment strategies, and more.

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