Gold is one of the oldest physical asset classes, throughout the centuries it has been the most coveted asset in human history for many different reasons. Ancient cultures often associated gold with immortality because it does not corrode and can be easily shaped due to a low heat tolerance. In the modern day, those same desirable qualities for crafting jewelry are also vital to the tech industry, but why? And how is this beneficial to gold investors?
Nearly every electronic device in the modern world uses gold in its switch and relay contacts, soldered joints, connecting wires and connection strips. The average mobile phone contains £1 worth of gold inside it, a small amount but with billions of devices being made each year the tech industry is one of the larger manufacturing consumers of gold. Gold is so useful that even space agencies use it in all of their space-based vehicles from lunar rovers to rockets. But why is gold so in demand for technology?
Firstly gold is highly conductive, more so than cheaper materials such as copper, aluminum and silver. This means that currents travelling over the components encounter minimal resistance from gold, saving on power consumption.
Gold is a non-corrosive metal, unlike iron it does not rust when exposed to the elements. Gold dug up from 4,000 years ago still holds the same shine as gold minted a week ago (with some polish of course!). This is vital for electronic devices, if copper or another metal was used in them, the machines would be rapidly ruined due to rust from moisture in the air.
Finally gold is easily malleable, with a low melting point gold can be easily shaped without too much heat. Unlike other metals, gold is rather soft and can be easily bent, this is the reason why people will bite a coin or medal to see whether it is real gold. Due to its flexibility gold can be easily worked into tiny, complex components present in small electronics.
Now that we understand why gold is so important to the tech industry, why is it important to gold bullion investors? E-waste. Until we begin to colonise and mine other planets and asteroids, gold is a finite resource. However, only 17% of the materials in disposed electronic devices are actually recovered. This waste and the dwindling supply of world gold stocks means that prices of gold will continue to increase, in our technology dependent world.
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