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Gold’s use in tech hardware will keep it relevant forever

Gold has always been one of the most valuable materials in the world. Before the current times of fiat currencies, there was one universal payment method and it was in gold, silver, and bronze. Gold is the most valued one out of three. However, the world has long since moved on from this notion yet this precious metal still stays as relevant as before. This is because one of the innovation giant sectors of the last two centuries has found scientific use in it.

 

Gold Usage in Present Times

Although it is true that people do not trade with gold right now the technology sector is benefitting from it quite strongly. It is still all around us in electronic devices, cables, gold plated house materials, rings, necklaces, etc. Due to this, gold hasn’t become obsolete but on the contrary more utilized in the industrial sector. However, from the start of 2010, the usage slowly fell as the demand from the electronics sector decreased. This is due to the fact that the researchers started searching for cheaper alternatives to gold. At the very same time, this is exactly the same industry that contributed to the increase in demand as well. In 2017 the precious metal saw a surge in demand for as much as 88.2 tonnes in just one quarter which was the biggest increase since 2014.

 

The world economy is advancing. This means that as time goes by more and more people will be able to afford and utilize electronic devices. Everything is developing and average living quality for everyone across the world is slowly going up albeit faster in some regions than others. This is apparent in almost every industry operating in present times starting from automotive ending with consumer electronics and communications. They are all dependant on microchips and sensors to augment the functionalities of the products and gold is used exactly for this matter due to its ability to better conduct electricity. The trend is supposedly going to continue for the time being. Although, as we have already mentioned, companies are working on substitute the prospects of technological breakthrough is not as close as one may think. This means that the demand for gold should continue on its course for the time being.

 

Diversification of Interest after Suspension of the Gold Standard

The technology sector is not the only one running the demand for gold though. Although the gold standard has been made obsolete by the late Ronald Raegan’s government back in the 1970s people still consider it to be the most stable investment. Gold is gold and will always stay precious to people. This means that when some kind of economic turmoil happens across the world people will flock to gold as the means of having stable assets that won’t lose relevance.

 

Other than that, during times of economic crisis, it is only natural for people to flock towards gold. Gold prices have surged on the exchanges till its historic high passing $2000 per ounce in early August. This precedent was mainly due to the panic in the trading community as well as the population as a whole. The United States has the biggest issue with the novel coronavirus at this point with as many as 6.6 million infected and almost 200,000 deceased. In addition, the economy of the country has shrunk by 24% and the notion has started to emerge that the USD would lose its safe-haven status. This is why a good amount of people started panic investing in gold and due to demand, the prices have jumped up as well. This is seen by an unusually big amount of people registering their accounts with the foreign exchange market (Forex, FX) brokers. FX brokerages provide means to trade gold as well. Based on the reports from Forex Trading Bonus, an influential media outlet, this is done via CFDs but the firms do not register as such due to the onslaught of regulations and prefer to be mainly working on FX offers to draw in customers and then offer futures contracts for precious metals as well. The statistics have shown an increase in traders who were interested in investing in gold, which clearly indicates that the demand is slowly growing.

 

The novel coronavirus pandemic is a great example of this. Most of the countries across the world locked tight their borders and started moving forward with strict social distancing laws that basically forced a fair share of small to middle-sized businesses to close their doors. The tourism industry has suffered the most as the whole season prospects were basically out of the window. It is estimated that during the year 2020 the tourism sector will lose as much as $1 Trillion in revenue. It is worth noting that the latter is one of the most populated industries in terms of the workforce across the world. The coronavirus pandemic has put over 100 million jobs at stake and small to mid-sized touristic businesses as well as the infrastructure workers associated were left without guarantees of employment. The world economy is intertwined with each other. Tourism is not just guides and flights. There are busses and minibusses transporting individuals, restaurants, hotels, airlines, and even whole countries that heavily depend on income from tourism. Greece, Spain, The Republic of Georgia, and many other nations were impacted by the lack of movement across the world. Since the borders were shut tightly the airline industry was unable to perform their scheduled flights. This is one of the primary ways to move around the world in acceptable time frames. The International Air Transport Association (IATA) is reporting as much as $84 million potential loss due to the ongoing events.

 

Conclusion

Gold is not going anywhere. It is still widely utilized in markets from all across the world starting from the technology field to enhance microchips, cables, and other utilities with gold coating or other fields like jewelry market that mainly provides beautiful additions to attire. Otherwise, people are still trading precious metals on exchanges and buy futures contracts or directly ounces of gold to resell later.

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