Gold is the most reliable and time-tested asset
Gold always retains its value in any economic environment
For a long time, it was gold that was the foundation of the global financial system and still remains one of the world's strongest currencies.
States keep this precious metal as insurance and protection against inflation. Every year the search for new deposits becomes more and more difficult and expensive.
Scientists predict that in the next 10-15 years, people will extract all the gold from known and currently available deposits.
Gold has been valued as a precious metal for more than six thousand years. This unique substance became a symbol of luxury and the equivalent of wealth in the 3rd millennium BC.
The chemical name of the element in the Mendeleev table is Aurum, which in Latin sounds like Goddess of the Dawn.
This element is rare in nature, so its extraction is a long search for a deposit and a labor-intensive process of extracting gold from ore and bulk rocks.
Gold reserves in the subsoil at the end of 2019 were 55.460 tons. This will maintain the current rate of global production only for the next 14 years. Subsequently, there will inevitably be a decline in gold mining and production, which will cause the cost to rise.
The production of gold on an industrial scale can be carried out only if the deposit is profitable – at least 3 g per ton of ore. Gold can also be obtained as a by-product of mining other raw materials, such as copper, as well as by extracting gold from electronics (so-called recovered gold).
Gold is not mined in all countries. This is due to the rare occurrence of this element in nature, as well as to the complexity of industrial production technologies.
Until recently, South Africa, the USA, Australia and Canada were the main suppliers of gold to the world market. Back in 1995, these 4 countries accounted for 56% of the annual production. However, over the past 25 years, there has been geographic diversification, and in 2020 their contribution to global production fell to 24%.
Growth dynamics of production
Over the past 25 years, along with the diversification of production, there has been a significant increase in production
- in 1995 — 2.299 tons
- in 2018 — 3.556 tons (55% more than in 1995)
- in 2019 — 3.531,8 tons
- in 2020 — 3.400,8 tons
Leading countries in gold mining
- China 440 tons/year
- Australia 300 tons/year
- Russia 255 tons/year
- USA 230 tons/year
- Canada 175 tons/year
- Peru 160 tons/year
- South Africa 145 tons/year
- Mexico 130 tons/year
Refining is the process of separating (purifying) precious metals from impurities.
Specialized refineries purify the gold of the highest 999 fine, check the actual weight and fineness of the bullion, and then brand the gold by the manufacturer, which indicates compliance with quality standards.
There are three groups of refining methods, which can be used alone or in combination with each other:
- Dry, in which the molten gold is treated with chemical reagents or remelted with various fluxes.
- Wet, based on dissolving impurities in different acids.
To obtain gold of the highest 999,9 and 999,99 fine, the electrolysis method is most commonly used.
Where is the mined Gold now?
In the vaults of Central Banks
Owned by private investors
In industrial and jewelry products, space, digital and medical equipment
Leading Countries in Gold Reserves for 2020
- USA 8,133.5 tons
- Germany 3,362.4 tons
- International Monetary Fund 2,814.0 tons
- Italy 2,451.8 tons
- France 2,436.2 tons
- Russia 2,295.4 tons
- China 1,948.3 tons
- Switzerland 1,040.0 tons
- Japan 765.2 tons
- India 676.6 tons
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There are 2 main types of gold
For jewelry gold, what are important are strength and durability.
Pure gold isn't used in jewelry because of its softness. That is why varieties such as yellow, white, red, pink, gray and even green gold appeared.
For investment gold, it's important the purity of the metal.
The basic standard of purity for gold stored in banks (in bars weighing 400 ounces or 12,5 kg) – not less than 995, and for bars of lesser weight – 999,9.
Such a high assay indicates that the gold doesn't contain impurities of other elements.
of jewelry gold
The value of the jewelry depends on the percentage of pure gold and other metals in the alloy: the higher the percentage of pure gold in the
alloy, the higher the carat and higher the price.
What types of gold are worth investing in
Gold jewelry is the most difficult asset to invest in, as its buy price is significantly higher than the sell price. Acquisition of jewelry is more an investment in an art object than in gold.
To preserve capital, you should buy investment gold of high purity in the form of
- Weight ingots, the purity of which is from 995 to 999,9
- In the form of gold coins weighing from 1/10 ounce (3.1 grams) to 1 ounce (31.1 grams) with a purity of at least 900 samples (21 carats), produced after 1.800
The mass of gold investment bars is 1, 5, 20, 50, 100, 250, 500, 1.000, 12.000 grams.
According to the manufacturing technology, gold bars are divided into:
- Stamped ingots made by cutting from solid flat sheets
- Cast ingots made by pouring into molds
- Measured ingots with a weight of no more than 1.000 g. (manufactured for subsequent sale to individuals and legal entities)
- Standard bars with a weight of about 400 ounces (12.5 kg), which are used for the production of measured bars; if purchased for investment purposes, they are kept in banks ("bank gold")
Gold has risen more than 50 times in 50 years
In 1970 the value of an ounce of gold was $35,5
In 2020 the value of gold reached a record $2,068
In the historical perspective, gold will inevitably rise
has increased by 140%
to invest in Gold
Retains its value
Protects capital from inflation
Protection against deflation
Guarantee of the future