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3 Surprising Facts You Probably Didn’t Know About Gold

Posted by Metals Corporate on

By John McDonald

Sure, it makes beautiful jewelry and is a fantastic safe-haven asset when Wall Street gets rough, but why is gold so expensive? 

Since long before recorded history, royalty has been wearing it, wars have been fought for it, and kingdoms have risen and fallen by their ability to obtain it. 

Today, more than ever, the yellow metal gleams with allure for investors. Let’s take a look at the history of this valuable asset to figure out just what makes it so useful and attractive in a secure investment portfolio. 

We expect you’ll be surprised by what you learn.

Surprising Fact #1: Gold is likely the result of stars colliding. 

We know gold is sparkly, but did you know that most scientists believe gold atoms are the result of a collision between two neutron stars almost 4 billion years ago? 

Neutron stars are extremely dense stars just one step away from being black holes, so they have lots and lots of highly concentrated materials in them that would blow everywhere if two of these stars ran into each other. 

Such a collision would likely create an incredible explosion filled with countless unprecedented reactions. 

Scientists speculate that when the two neutron stars collided, the resulting explosion created gold meteorites that eventually crashed into planet Earth. 

As our planet’s core heated, the gold “nuggets” were forced toward the surface. 

Humans likely came into contact with some of these gold flakes about 40,000 years ago during paleolithic times, and we’ve been collecting it ever since thanks to its highly malleable quality and bright yellow appearance. 

Surprising Fact #2: Ancient Egyptians believed gold was the “flesh” of the gods. 

When King Tut died around 1323 B.C., he was buried in three gold-wrapped coffins with an estimated worth, in today’s dollars, of more than $1 million. 

He hoped that by being buried in what he believed to be the literal “skin” of his deities he would optimize his chances of immortality. 

That is one of the oldest examples of nobility taking massive amounts of gold for personal use, but it is far from the only example. 

In 2009, archeologists found one of the largest hoards of gold ever discovered in a field in Staffordshire, England, where more than 5 kg of gold were discovered beneath an ordinary farm field by a retiree with a metal detector. 

While the hoarders’ identities will likely remain shrouded in mystery since the trove dates to the dark ages, the militaristic nature of the pieces indicates it was likely a collection of items seized during military combat and hidden in British soil.

Of course, if kings and pharaohs are not quite “noble” enough for you, gold is also considered a “noble metal” according to the Periodic Table of the Elements, meaning it does not corrode and is not easily attacked by acids. 

Because it is resilient, extremely malleable, does not corrode or rust, and is a perfect conductor for electricity, manufacturers generally consider gold to be the “king” of noble metals, as its global value reflects. 

Surprising Fact #3: It can take up to 10 years to identify a potential gold mine. 

When most people think of mining for gold, they envision something similar to Snow White’s “7 Dwarves” trooping off with their pickaxes to hack gemstones and golden nuggets out of the ground. 

If the fairy tale had been based in reality, however, the dwarves would have far more likely been spending their time with geologists and engineers attempting to identify a productive mining site since it can take a full decade just to identify an area with promise. 

Only about 10 percent of the 0.1 percent of potential gold mining sites that are identified as being both likely to produce gold and viable for mining operations actually ever become mines. 

The mining factor is one big reason gold is so expensive: There is just not a lot of it available, and it is very hard to get to new sources of this precious metal!

If you melted down the entire stock of above-ground gold, meaning it is already mined and either in storage or use, then you would have only about 190,000 tons of gold in total. 

That might seem like a lot at first, but consider how it is presently divvied up. The United States is estimated to have just over 8,000 tons, and Germany has around 3,300 tons. 

Italy, France, and Russia all have between 2,200 and 2,500 tons, and China has about 2,000 tons. 

You may be thinking, “Sure, but that’s only about 10 percent of that 190,000 you just told us about.” That is true, but most of the gold included in that estimated number is being used in jewelry, for electronics, and even on space missions. 

Central banks around the world hold only about 17 percent of the gold on the planet, but they have enormous buying power and play a major role in the price of gold as it rises and falls. 

This is why most savvy investors hold at least some physical gold in their investment portfolios, since the metal is a perfect investment for economically volatile periods of time. 

When other markets get rocky, the gold market just gets stronger as individuals and nation’s buy up reserves to fortify their financial positions. 

Source: Business Insider

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