Gold has been a sought-after investment for millennia, particularly as investing becomes increasingly popular. Precious metals and various assets are now more obtainable, and with inflation negatively impacting fiat currencies, many investors are choosing to invest in gold.
Yet, gold is more than just a commodity for collection. Its uses extend beyond mere jewelry or as a hedge against inflation. Gold is incorporated into numerous everyday products and is essential in certain sectors that emphasize high-quality customer experiences.
While traditional gold investors often concentrate on gold bars and jewelry, this guide will explore some of the more practical roles that gold plays in contemporary society.
Electronics
Various electronics, including smartphones, computers, and tablets, utilize gold. This precious metal is a key part of semiconductors that enable these devices to function and serve as memory storage.
However, the amount of gold contained in individual devices is minimal—like a desktop computer, which holds around 0.007 ounces. Although recovering gold from such devices may not provide a significant return, the widespread production does contribute to the overall demand for gold.
For investors, tracking the demand for gold in the electronics sector can be enhanced by observing the stock performance of tech giants, such as Apple and Microsoft. Increased sales from these companies could lead to a rise in gold demand.
Automobiles
Gold is not limited to just electronics; it can also be found in automobiles. For instance, the engine control unit (ECU) of combustion engine vehicles contains gold, along with other safety systems.
Gold’s ability to reflect heat makes it valuable in various car components, and its presence in safety mechanisms, like airbags, allows these systems to activate promptly in emergencies, potentially saving lives. The U.S. automobile industry, currently worth $1.51 trillion, is projected to expand with a compound annual growth rate (CAGR) of 3.50% through 2032, increasing gold’s demand in this sector.
Dentistry
In dentistry, gold is often utilized for fillings and crowns, not just for aesthetic appeal but for its durability. Gold’s soft nature allows it to be more comfortable for patients and less abrasive on gums.
While daily brushing can reduce the need for dental work, many individuals still require fillings or crowns as they age. Gold options provide pain relief during and after dental procedures.
Healthcare
The healthcare sector has seen significant advancements, with various medical devices, such as pacemakers, blood pressure monitors, and defibrillators, heavily relying on gold for functionality.
With the medical device market currently valued at $13.31 trillion and expected to grow at a CAGR of 8.27% until 2031, the demand for gold for these applications is set to increase.
Aerospace
Gold plays a critical role in aerospace applications, found in aircraft components like rocket engines and electrical connectors. It serves as an insulator, helping maintain optimal temperatures for aircraft as they ascend through changing atmospheres.
Moreover, gold’s durability makes it ideal for satellites, protecting them from radiation and temperature changes. The aerospace market, valued at $662.4 billion, is projected to grow at a CAGR of 7.2% until 2033, indicating a corresponding increase in gold demand.
How is gold primarily used?
Gold’s primary application is in luxury goods and as a store of value. Over 90% of gold goes into jewelry or is held by central banks and investors. The remaining supply finds its way into various industries mentioned above.
Although gold is predominantly associated with jewelry and investments, its significance across multiple sectors is considerable. Many businesses require gold—though typically in small amounts—to produce their products and services. For example, satellites might contain just one to three ounces of gold. Industry efficiency in using gold does not diminish its demand across diverse fields.
photo credit: money.com
