Gold's industrial applications: What investors should know now
Gold is having a moment. The price of gold has shot up over the past year, hitting its current apex, which is just shy of $3,000 per ounce. Various economic factors have driven up the cost of the precious metal as investors seek more stability in what many consider a safe-haven asset. For starters, January inflation numbers came in higher than expected and the Federal Reserve will likely hold steady and not cut interest rates in March. These factors, coupled with economic and political uncertainties, have helped spur the recent uptick in gold investing.
While gold is commonly used in jewelry and gold bars and gold coins are often utilized as a store of value, the reality is that precious metals like gold have many other uses as well. There are important gold industrial applications that utilize its unique characteristics. And, these wide-ranging uses in a variety of sectors can make gold investments more appealing for people looking to diversify their portfolios.
Find out how to add gold to your investments today.
Gold's industrial applications: What investors should know now
Physical gold is known for its luster, making it a prime choice for jewelry. But aside from being eye-catching, there are other reasons gold usage occurs in various applications.
"If you think about using gold or silver in an application, the silver will tarnish and it will get a silver oxide coating on it over time. Gold doesn't tarnish," says Jeffrey Christian, the managing partner of CPM Group, LLC, a commodities research and management firm with a focus on precious metals.
This characteristic alone makes gold more valuable than many of the alternatives, including silver. However, gold has other physical properties that also make it distinctly useful in certain applications.
"Typically, because it's [gold] conductive and noncorrosive and malleable. Those are the three principles that really make it worth doing things with it," says Joshua Barone, wealth manager at Savvy Advisors.
Learn more about the many benefits of gold investing now.
Gold is used in various electronics
Gold's conductivity makes it apt for use in a variety of electronics you probably use every day. For example, small portions of gold can be found in:
- Memory chips in computers
- Sensors and connectors in a vehicle
- Connectors in a television or monitor
- Central processing units (CPU) in both smartphones and computers
"Gold's chemical and physical properties combine to make it irreplaceable in many high-end devices in consumer electronics and automotive applications. Most types of semiconductor chips use gold as either a coating or as thin bonding wires," says Joe Cavatoni, senior market strategist at the World Gold Council.
Gold is used in aerospace technologies
According to the National Environmental Satellite, Data, and Information Service, gold coating and vapor-deposited gold taping are used in some components of satellites. Gold's durability ensures that satellites have protection from the elements and can remain at the appropriate temperature. It's also used in spacesuits and serves an important purpose.
"If you've ever looked at an astronaut walking in space and then see his visor, it has got gold in it to protect his eyes," says Barone.
Additionally, gold may be used in various parts of commercial aircraft, including:
- Turbine blades
- Electrical connectors
- Circuit breakers
- Spark plugs
- Satellite wire
Gold has broad applications in healthcare
One of the more commonly known uses of gold is in dentistry. The precious metal is the material used in some crowns and fillings, and its strength can help protect your teeth and create a barrier of protection. Gold can also be present in some medical devices.
"You'll have pacemakers and other things that will have gold electrodes and gold wires in them," says Christian.
Additionally, gold wire may be used in the coil of a cochlear implant.
The bottom line
While gold jewelry is popular, its industrial applications serve other sectors too. Gold's utility and enduring nature make it an attractive component in many items, leading to a broad range of uses. "The industrial applications of gold speak to its dual nature as both a consumer good and an investment asset and the asset benefits from these diverse sources of demand," says Cavatoni.
Between these uses and its other benefits, gold can be a solid investment choice for those looking to hedge against inflation and uncertainty, whether you're buying physical gold or looking at alternatives such as gold stocks, gold exchange-traded funds (ETFs) or gold individual retirement accounts (IRAs). And, as gold prices continue their uphill climb, this may be a good time to get in before the price goes much higher.
Meet
Josh Barone
I'm Joshua, a financial advisor from Reno, Nevada. As someone who co-founded and built a trust company and investment advisory firm from the ground up, I’m passionate about sharing the lessons I learned on my financial journey of 30+ years to guide and empower clients to secure their financial futures.
Gold's industrial applications: What investors should know now
Gold is having a moment. The price of gold has shot up over the past year, hitting its current apex, which is just shy of $3,000 per ounce. Various economic factors have driven up the cost of the precious metal as investors seek more stability in what many consider a safe-haven asset. For starters, January inflation numbers came in higher than expected and the Federal Reserve will likely hold steady and not cut interest rates in March. These factors, coupled with economic and political uncertainties, have helped spur the recent uptick in gold investing.
While gold is commonly used in jewelry and gold bars and gold coins are often utilized as a store of value, the reality is that precious metals like gold have many other uses as well. There are important gold industrial applications that utilize its unique characteristics. And, these wide-ranging uses in a variety of sectors can make gold investments more appealing for people looking to diversify their portfolios.
Find out how to add gold to your investments today.
Gold's industrial applications: What investors should know now
Physical gold is known for its luster, making it a prime choice for jewelry. But aside from being eye-catching, there are other reasons gold usage occurs in various applications.
"If you think about using gold or silver in an application, the silver will tarnish and it will get a silver oxide coating on it over time. Gold doesn't tarnish," says Jeffrey Christian, the managing partner of CPM Group, LLC, a commodities research and management firm with a focus on precious metals.
This characteristic alone makes gold more valuable than many of the alternatives, including silver. However, gold has other physical properties that also make it distinctly useful in certain applications.
"Typically, because it's [gold] conductive and noncorrosive and malleable. Those are the three principles that really make it worth doing things with it," says Joshua Barone, wealth manager at Savvy Advisors.
Learn more about the many benefits of gold investing now.
Gold is used in various electronics
Gold's conductivity makes it apt for use in a variety of electronics you probably use every day. For example, small portions of gold can be found in:
- Memory chips in computers
- Sensors and connectors in a vehicle
- Connectors in a television or monitor
- Central processing units (CPU) in both smartphones and computers
"Gold's chemical and physical properties combine to make it irreplaceable in many high-end devices in consumer electronics and automotive applications. Most types of semiconductor chips use gold as either a coating or as thin bonding wires," says Joe Cavatoni, senior market strategist at the World Gold Council.
Gold is used in aerospace technologies
According to the National Environmental Satellite, Data, and Information Service, gold coating and vapor-deposited gold taping are used in some components of satellites. Gold's durability ensures that satellites have protection from the elements and can remain at the appropriate temperature. It's also used in spacesuits and serves an important purpose.
"If you've ever looked at an astronaut walking in space and then see his visor, it has got gold in it to protect his eyes," says Barone.
Additionally, gold may be used in various parts of commercial aircraft, including:
- Turbine blades
- Electrical connectors
- Circuit breakers
- Spark plugs
- Satellite wire
Gold has broad applications in healthcare
One of the more commonly known uses of gold is in dentistry. The precious metal is the material used in some crowns and fillings, and its strength can help protect your teeth and create a barrier of protection. Gold can also be present in some medical devices.
"You'll have pacemakers and other things that will have gold electrodes and gold wires in them," says Christian.
Additionally, gold wire may be used in the coil of a cochlear implant.
The bottom line
While gold jewelry is popular, its industrial applications serve other sectors too. Gold's utility and enduring nature make it an attractive component in many items, leading to a broad range of uses. "The industrial applications of gold speak to its dual nature as both a consumer good and an investment asset and the asset benefits from these diverse sources of demand," says Cavatoni.
Between these uses and its other benefits, gold can be a solid investment choice for those looking to hedge against inflation and uncertainty, whether you're buying physical gold or looking at alternatives such as gold stocks, gold exchange-traded funds (ETFs) or gold individual retirement accounts (IRAs). And, as gold prices continue their uphill climb, this may be a good time to get in before the price goes much higher.
Meet
Josh Barone
I'm Joshua, a financial advisor from Reno, Nevada. As someone who co-founded and built a trust company and investment advisory firm from the ground up, I’m passionate about sharing the lessons I learned on my financial journey of 30+ years to guide and empower clients to secure their financial futures.
