Gold in the spotlight

Author: Magdalena Kořínková

Gold – even the word has a shiny vibe! How and when did it come to be that gold is the king of all precious metals? The first records of the discovery of gold date back to around 6,000 BC, and by 3,000 BC, gold was already being used to adorn pharaohs. Pieces of natural gold have been found in Spanish caves inhabited by Palaeolithic humans as early as 40,000 BC. Gold was reportedly first used as currency in the 7th century BC in the Kingdom of Lydia. Since then, gold has been, is, and will always be the reliable asset we turn to in uncertain times.

What exactly is gold?

Gold, chemically symbolised as Au, is an extremely rare mineral with a high density of 19.3 g/cm³ and a melting point of 1064 °C. To give you an idea, one kilogram of gold can be cast into a cube with edges measuring 3.75 cm.

Pure gold contains 24 carats (purity 999.9/1000). In jewellery, 14-carat gold (purity 585/1000) and 18-carat gold (purity 750/1000) are commonly used, while coins are often made with gold containing 22–23 carats (purity approximately 900/1000) or the so-called dukat gold (986/1000). The most commonly available gold is therefore 14-carat, with a gold content of 58.5%.

What exactly are carats? These are unitless measures of the purity of gold alloys in jewellery.

Yellow, white, or rose?

Not types of gold – different colours are achieved by mixing other metals. Rose gold gets its beautiful hue from copper, and white gold from silver or palladium. Gold purity can be determined by its hallmark – the small symbols found on the inside of a ring or in another discreet spot on a piece of jewellery. These marks indicate the purity and origin of the metal, confirming it has been inspected by an assay office and where the inspection took place. Purity can also be verified through other methods, such as a spectrometer, touchstone, or laboratory testing.

Troy ounce

This is the standard weight unit used on national and international markets for gold, silver, platinum, and other precious metals as well as precious stones. Why “troy”? It doesn’t originate from ancient Troy; the name comes from the French city of Troyes, where it was first used for trade in the Middle Ages. A troy ounce is 31.103 grams, enough to create a wire 80 km long or beat into a translucent sheet covering an area of 10 m².

The value of gold on the exchange is currently quoted in US dollars, specifically for one troy ounce of pure gold.

Gold extraction

Did you just imagine the Wild West and the gold rush? Gold panning was historically the simplest and oldest method. Today, most significant deposits for panning are nearly exhausted, although many adventurers still head to rivers and streams with pans.

To extract larger quantities of gold, a more sophisticated method called “leaching” is required. This process involves crushed ore coming into contact with a leaching solution, with the final result obtained by reduction. It is environmentally risky and not very cost-effective, so mining is not pursued in many areas despite documented gold deposits (yet).

The largest deposits are currently in China, Australia, Russia, the USA, Canada, Ghana, Burkina Faso, South Africa, Brazil, Peru...

Gold buying

The price of gold today will likely differ from yesterday – or tomorrow. It is influenced by numerous unpredictable factors. The buying price of gold is also never the same as its exchange value. The buying price depends on the amount of gold contained in the evaluated material.

Gold exchange trading is based on the realtime spot, i.e., the current price of gold on the commodity exchange, or the future fixing announced twice daily by the London Bullion Market Association (London Bullion Market Association).

An enduring certainty

This has held true for millennia, and every crisis reaffirms this truth. This year, discussions about gold have reignited as governments inject money into shock-frozen economies by printing vast amounts of unbacked currency. The spectre of a recession has loomed since last autumn, and recent events have accelerated it. Currently, over $2,000 is paid for an ounce of gold, and the rapid rise in gold prices is far from over. How high will it climb?

Gold as an investment?

A wise choice! Of course, money can be stored in many ways, but gold has consistently retained its value over millennia. What form should you choose? Investment coins, bars, or ingots are ideal if you plan to store gold in a safe. But isn’t it a shame when you can wear gold? Gold jewellery, especially antique pieces, also carry artistic and aesthetic value. A quality antique gold jewel should be the golden standard for every lady and gentleman.