Putting your money on gold might take different forms, starting from buying the real-physical yellow metal in any form, to being a partner in this industry as a shareholder. We buy and consume gold almost every day. Sometimes we know it, and sometimes, we don’t. Either way, the world can’t have enough of gold, and it’s being sold every day everywhere.
We buy gold in weddings, as gifts for our loved ones, or trophies and medals for our kids’ torments. We know we are buying gold somehow then, either pure gold, gold alloys or even gold-plated items. However, we buy gold without noticing; at least some doesn’t.
Gold in Electronics
The precious yellow metal is a great conductor of electricity, have a great resistance to corrosion and very high melting point. That makes it ideal for making high-performance components and critical parts in smart phones and computers.
There are about 5 troy ounces of gold in 5,000 smart-phones, 5 troy ounces each 200 laptop and another 5 troy ounces of gold 2,000 in desktop circuit boards.
On a side note, there are 355 million computer sold in 2011 and 427 million smart-phone sold in 2012. Each 10,000 smartphone weighs almost a ton, which yields 10 troy ounces of gold. Around 1.8 million of those phones are sold every day. Just imagine how much gold we buy without even noticing.
Gold in Jewelry
Just in the first quarter of 2013, the jewelry market absorbed 551 tonnes of gold, worth around $28.9 billion, in three months. Most of these jewelries went to India and China, the world top consumers of gold.
The jewelry sector consumes around 49% of the above-ground gold. Of course, as it requires high quantities of pure gold to satisfy the consumers’ needs. Moreover, people in developing countries, especially rural areas, buy gold jewelries as an investment and for ceremonial purposes.
The talk about gold jewelry might never ends as it is the oldest for of gold trades humans had ever known, and it never stops! Wherever, whenever, there is always a chance to buy a gold ring, necklace or even a tiny gold earring or piercing.
The main reason behind purchasing gold is for investment, as a store of value and a hedge against inflation. Who buys gold for this reason and how they buy it? All the big guys with lots of cash, such as government’s central banks and large commercial banks for instance. Central banks alone account for 17% of the above-ground stock of gold.
Investors buy gold mostly in bars forms, in ounces. As these types of gold buyers purchase in bulks, they prefer larger bars, such as 400 oz. bars. However, they also buy coins and medallions, as long as they are made of gold, they’ll buy it.
These guys didn’t limit themselves in buying the physical gold only; they buy gold Exchange Traded Funds (ETFs) or similar products. They even make money from buying and selling gold futures and options without even moving the physical gold from the vaults, taking advantage from the daily price volatility.
Are they the only ones who make money from gold? Of course not! Anyone can make money from gold. Being a shareholder in a gold mining company is like owning a gold mine. Sure, the gold mining industry has its ups and downs, but every investment has its risks.
“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.” – Warren Buffet
To conclude, the world can’t forget about gold. It will always be sought and purchased. So, why not make something out of it? There are plenty of ways to buy gold, and even more methods to sell it or use it. The trick is about the timing. Buy low and sell high.