Gold has been a precious metal for thousands of years due to its unique properties and perceived value. Its physical and chemical properties make it a valuable commodity for various industries and investors alike.
One of the significant drivers of gold demand is its use in jewellery. Gold is a popular choice for jewellery due to its beauty, durability, and malleability. Over 50% of the gold demand comes from the jewellery industry. The use of gold in religious ceremonies and traditional customs further contributes to its demand.
Apart from its use in jewellery, gold is also in high demand for its use in technology and industry. Gold has high conductivity and is corrosion-resistant, making it an ideal material for use in electronic devices such as smartphones, laptops, and medical equipment. Gold is also used in the aerospace industry to produce aircraft, satellites and space equipment. Gold is also used in the dental and medical fields for fillings, implants, and other medical applications.
The James Webb Telescope is an excellent example of the use of gold in technology. The telescope uses three mirrors of different sizes for a wide field of view. The primary mirror comprises 18 smaller hexagonal mirrors, forming a concave structure. The secondary mirror is off-axis and convex, while the tertiary mirror corrects astigmatism and directs light to the steering mirror. The mirrors are made of light beryllium, which holds shape at low temperatures and is coated with a thin layer of gold for reflectiveness in visible and infrared light. The gold coating reflects 99% of infrared light and is protected by a layer of glass.
Gold is also a popular investment option, often viewed as a safe-haven asset and a hedge against inflation and currency fluctuations. It is used as a form of savings and a store of value. Gold is bought in the form of coins, bullions, ETFs and other investment vehicles, contributing to the demand for gold.
Central banks also play a role in the demand for gold. Central banks hold gold as a reserve asset and part of their foreign exchange reserves. This is because gold is considered a liquid and low-risk asset that can be easily traded in international markets. The top ten central bank holders of gold in the world include the United States, Germany, IMF, Italy, France, Russian Federation, China, Switzerland, Japan, and India.
The demand for gold is also influenced by population growth, urbanization, and economic growth. As the population grows, urbanization increases, and economies grow, the demand for gold is expected to remain strong.
Gold's physical and chemical properties make it a unique and valuable element in various fields. Its high conductivity, durability, and malleability make it an ideal material for use in jewellery, technology, and industry. Its stability in air and water, non-toxicity, and non-irritancy make it a safe element for human consumption. Its perceived value as a safe-haven asset and a hedge against inflation and currency fluctuations make it a popular investment option.
In conclusion, the demand for gold is driven by various factors, including its use in jewellery, technology, industry, investment, and central banking. As the world's population and economy continue to grow, the demand for gold is expected to remain strong. Gold has played an essential role in human civilization, and it will continue to do so in the future.