As much as I like to argue that you need to be hard-nosed and practical whenever you sink your hard earned money into precious metals, I realize that most people really invest in gold because a) it’s traditional to do so, and b) gold is pretty when the light hits it just right.
Those aren’t bad reasons, really. They’re based on human nature and emotion, and every good salesman knows you have to appeal to both to make a sale.
But practicality has also been a factor in the recent gold boom, especially among those who can count the cards and see what’s likely to come up in the future.
And that future is increasingly high-tech.
The Smart Money
Gold happens to be a wonderful conductor of electricity. In fact, it’s one of the best room-temperature conductors in nature. For that reason alone, it’s supremely valuable to modern industry.
Furthermore, gold resists corrosion, doesn’t tarnish, and is quite easy to work, all of which increase its industrial value significantly.
You’ll find gold in every computer, calculator, stereo, and TV — anything that uses a circuit board — in tiny amounts. As manufacturing processes improve, the amount of gold in your average electronic device is decreasing. But consider the billions of electronic devices in use, and you’re talking huge amounts of gold.
That’s one reason why you should buy gold bullion and hang onto it long term. We’re only going to need more and more electronic devices as time goes on, especially as the billions of people in places like China and India start to stretch their new economic muscles even more than they already have.
And let’s not forget, electronics are everywhere these days, including in the vehicles we drive. There’s all kinds of gold lurking in the sensors and microchips distributed throughout even the least expensive automobiles. It plays crucial roles in air bag sensors, for example, as well as in anti-lock braking systems.
In many industrial processes, gold acts as a catalyst to spur on chemical reactions. Furthermore, there are microscopic specks of gold alloy called “nanoparticles” in the catalytic converters of many automotive transmissions, where they screen nasty emissions out of the exhaust.
Gold nanoparticles can also increase the efficiency of solar cells, and will no doubt become the “gold standard” for that use in the future. Manufacturers have also worked out how to layer gold on glass in microscopically thin sheets to act as effective radiation shields, without appreciably decreasing the transparency.
Aircraft manufactures often use gold this way for the windscreens of their products, and builders are using it more and more often in the windows of office buildings. Windows treated this way not only block out excess light, they keep the building’s interior cooler.
Gold teeth and dental crowns have always been popular, and with more people than ever, there’s likely to be more gold dental work than ever. Gold is also an ingredient in some medicines: for example, sodium aurichloride for arthritis.
Gold nanoparticles are also incorporated into some home pregnancy kits (of all things), to maximize accuracy. Plus, they show great promise as the basis for infection-fighting antibacterial medications, not to mention as vehicles for delivering drugs to specific parts of the body.
The Bottom Line
Obviously, most of the processes I’ve described here use incredibly tiny amounts of gold to get the job done. But multiply that by billions of instances of use, add in all the new uses we’re finding for gold… and it’s easy to see that it’s time to invest in gold more heavily than ever.