Do Gold Funds Benefit From Industrial Gold Uses?

Reviewed: April 16, 2016
By FinanceWeb

Gold has always been prized for its beauty, chemical properties and scarcity. Banks, businesses and governments use gold as money for international trade. Learn why gold funds benefit from industrial, monetary and personal uses of the precious metal.

Gold Conducts Electricity

Gold is one of the best conductors of metal and its pliability means that it can be turned into sheets, leaf or wire. Oftentimes, gold is combined with other metals to make them more supple. Many high-end industrial processes will use small amounts of this precious metal – aerospace, solar panels and high-tech electronics – to create stability.

Experts estimate that most cell phones contain at least 50 cents worth of gold in the electrical contact points. In fact, computers, televisions, radios and iPods all contain a smidgen of gold. Some individuals will salvage these electronics to extract the precious metals therefrom.

Gold Does Not Tarnish

The bottom of the ocean, Swiss banking safe deposit boxes and jewelry cases might all contain some beautiful gold trinkets. This shiny metal reminds people of the sun, which provides us with the heat and light we need for life.

Of course, wealthy individuals love to adorn themselves in gold chains. The Notre Dame Fighting Irish use thin gold leaf for their helmets. Temples, churches and mosques will also use the precious metals for their rituals.

An estimated 78% of gold consumption is in the form of jewelry. For millennia, brides have been adorning their bodies with this attractive precious metal. For centuries, bankers have been checking their gold watches as they wait for clients.

For decades, gold funds have been available to the astute investor. These investments monetize the precious metal value based on its spot price. Investors will watch mining, industrial usage, recycling and trade to gauge the proper value of these popular gold funds.

High Demand Creates Value

Of course, gold is desired by many different individuals and sectors. This underlying demand is key to the value of the gold funds. Thus, if solar panel production increases, then gold demand should also increase.

Historically, the City of London had controlled the gold markets. Then, New York City gained prominence. Now, Shanghai is also becoming a big player in gold exchange.

Women will always want their gold necklaces and men will always want their electronic devices. Thus, the future of gold funds is quite bright!