GOLD

Production and uses of gold

Uses

It is difficult to state accurately the apportionment of the annual world production of gold among its various uses. There are several reasons for this, chief of which is the tendency for certain financial institutions and individuals to add to their hoards of the metal. Rarely is the magnitude of these hoards made public nor are their annual increases or decrease known. The purchase of gold, for uses other than) the manufacture of jewellery, industrial purposes, etc., is prohibited by law in many countries, but despite this hoarding is traditional in many Asiatic and European countries and is probably also common in North and South America. It is estimated that about 20 per cent of the annual world production of gold goes into the vaults of governments and central banks as a monetary reserve; some 5 per cent probably passes into the hands of private and corporate hoarders; and the remainder about 75 per cent, some 36 million oz, is used in fabricated articles. Of the last some 60 per cent is consumed in dentistry and the jewellery and coin industry; the remainder is utilized in a great variety of electronics and other industries.

Gold is the royal and aristocratic ornamental metal par excellence with a seductive natural colour, lustre and satin-like texture. Since ancient times this most beautiful of metals has traditionally enjoyed a use in articles of personal adornment, particularly in rings and a variety of costume jewellery. Considerable amounts of gold are also used in fountain pens, medallions, gold watches and in gold fillings in dentistry. Some gold has also been utilized since antiquity in the fabrication of chalices, cups, vases, shrines and a great variety of other articles cherished for their intrinsic value. In all of these uses gold is generally alloyed with copper or silver, the fineness of the gold alloy being expressed in "carats", Pure gold is '24 carat gold'.

Pure gold or that containing a low percentage of silver or copper can be hammered into extremely thin foil about 0.000005 inch in thickness. In the foil or leaf gold has been used for a great variety of decorative purposes on buildings statues and other articles since pre-Biblical times. Thin layers of gold welded to base metals such as nickel, copper or brass can be rolled or drawn into complex forms without rupturing the thin gold layers. Material of this nature is called gold plate and is used extensively in various types of jewellery, watchcases, spectacle rims, etc.

The industrial uses of gold depend essentially on its softness, the ease with which it alloys with silver, copper, or platinum metals, its great ductility and malleability, its great electrical and thermal conductivity and its chemical inertness and hence corrosion-resistance to oxygen, sulphur, most chemical compounds and nearly all of the single common acids. Most of the gold used in industry is consumed by the electronic and electrical engineering industries, the products ranging widely from coatings of vacuum tubes, specialized electrical contacts, electrical precision drawn wire leads, gold electroplate high frequency conductors, to printed circuits in computers, radios and television sets. Considerable amounts of gold are also used by industry in the fabrication of high temperature brazing alloys, linings for specialized chemical and nuclear plants, platinum-gold alloy spinnerets for viscose rayon plants, infrared and thermal reflectors in aircraft and space vehicles and heat shields for jet and rocket engines. Gold-coated window glass for buildings in hot climates and electrically heated windscreens having a thin transparent and conductive layer of gold are finding an increasing use in cars, aeroplanes, ships and locomotives throughout the world. Some gold is also consumed by the printing and furniture industries in the form of gold paints and by the ceramic industry in the form of organic 'liquid gold' for application in pottery and glassware. On firing or other treatment the organic gold compounds are reduced leaving a thin film of gold tightly bonded to the ceramic ware or glass. Small amounts of gold are also used for colouring glass, and gold salts are used to a small extent in certain photographic and medical preparations.

It seems probable that the industrial use of gold will increase substantially in the future as will also its use in jewellery and other articles of adornment. The amount of the annual increase is, however, conjectural, perhaps some 2 per cent of the present yearly production or about 1 million oz. One can also predict that there will be a substantial yearly increase in hoarding although the amounts cannot be reliably estimated. Presumably it will vary with the confidence that individuals place in their respective country's paper notes and base metal coinage. The fate of gold as a monetary standard in the settlement of international balances can only be conjectured. Should Utopia descend upon us we will have no need of an objective, tangible, enduring, weighable, readily transportable medium such as gold in our international financial transactions. But since that day appears far removed it would seem that gold will be that medium which will continue to keep all men honest in their trading and financial manipulations despite views to the contrary by many of our modern economists, stimulated it would seem by the thoughts of John Maynard Keynes, who referred to the position of the metal in the modern world as that "barbarous relic". Gold is the discipline that curbs the power of the printing press. Stephen Leacock (1932) touched upon this point in a memorable address on gold:

We have to have - I would say 'stable prices': you cannot have a world with the entire prices stable: you can only have a world in which the price level moves slowly with a regular and intermittent oscillation. But you can have and must have a fixed exchange. You cannot have a foreign trade based on monetary speculation: you have got to have something absolutely stable for your dealings with foreign nations, and I tell you, gentlemen. I am convinced that there is nothing that will take the place of some absolutely metallic standard, some standard of things, and not of opinions.

Gold in: Primitive Classic Medieval Renaissance post-Renaissance period.

Gold: Deposits Transport 1 2 3 4 5 6 Production 1 2 3 4 5

Rafal Swiecki, geological engineer email contact
February, 2008

This document is in the public domain.