Gold

Gold ranks among the oldest and most significant materials in human history. The radiant yellow metal fascinates not only through its visual appeal but above all through a unique combination of chemical durability, physical density and worldwide acceptance as a medium of exchange. The current gold price reflects the interplay of supply, demand, currency movements and the geopolitical backdrop.

Chemical and physical properties

Gold belongs to group 11 of the periodic table (the coinage metals) and is one of the few elements that occurs native in nature — that is, in pure metallic form. Its outstanding characteristics in summary:

• Corrosion resistance: gold dissolves in neither hydrochloric nor nitric acid; only aqua regia (a 1:3 mixture of nitric and hydrochloric acid) attacks it.
• Ductility: a single gram of gold can be drawn into a wire around 165 metres long, or beaten into gold leaf covering roughly 0.5 m² (about 0.1 µm thin).
• Density: at 19.32 g/cm³ gold is markedly heavier than most metals used in forgeries — a key feature in the Archimedes density test.
• Electrical conductivity: it trails silver and copper, yet gold does not oxidise and remains permanently contact-reliable — hence its indispensable role in the electronics industry.

Occurrence and mining

Gold is extremely rare in the Earth's crust, at around 0.004 ppm (parts per million). It is found in primary deposits (quartz veins, epithermal and mesothermal systems) as well as in secondary placer deposits, where weathering has concentrated it.

Global mine production has for years stood at roughly 3,400–3,600 tonnes annually. The largest producing countries are China, Australia, Russia, Canada and Ghana. Added to this is so-called recycled gold from old jewellery, electronic scrap and dental gold, which accounts for around 25–30% of annual supply.

Production costs are measured across the industry as all-in sustaining costs (AISC) and averaged roughly USD 1,200–1,350 per troy ounce in 2023.

Trading forms and finenesses

Gold is offered in various finenesses. In the investment segment, fine gold (999) dominates, with at least 999‰ purity. Jewellery and dental alloys contain additional metals that influence colour, hardness and workability.

For investment purposes, only products of at least 995‰ fineness (bars) or 900‰ (coins) qualify as investment gold under the EU VAT exemption.

Price formation: how the gold price arises

The global gold price is quoted in US dollars per troy ounce (31.1035 g). Two pricing mechanisms shape the market:

LBMA fixing: twice daily (10:30 and 15:00 London time) banks set the LBMA Gold Price electronically — the reference price for mining companies, central banks and industrial buyers.

Spot price: the spot price trades continuously on the futures markets (COMEX in New York, TOCOM in Tokyo) and forms the basis for dealer prices.

Buying price (dealer)  = spot price − spread
Selling price (dealer) = spot price + premium (agio)

The premium (agio) varies by product, denomination and market conditions. Small units (1-gram bars, fractional coins) carry markedly higher premiums than kilo bars or 100-gram bars.

Gold as an investment

Gold produces neither interest nor dividends. Its appeal as an investment rests on other qualities:

1. Inflation protection: over the long run gold tends to preserve purchasing power, even though short-term deviations can be substantial.
2. Safe haven: during crises and recessions demand for gold often rises, as it is regarded as a last-resort means of payment.
3. Low correlation: gold correlates weakly with equities and bonds and can dampen portfolio swings.
4. Currency protection: when the dollar weakens the gold price often rises, since the two tend to move in opposite directions.

The current sentiment gauge for the precious metals market is shown by the Fear & Greed Index. Long-term price paths can be found under historical precious metal prices.

Note: this does not constitute investment or tax advice. Tax matters — such as Capital Gains Tax on a disposal or the VAT exemption for investment gold — should be clarified with a qualified adviser. In Ireland a private individual's gain on selling gold is liable to Capital Gains Tax at 33% after the annual EUR 1,270 exemption, with no holding-period relief.

Investment forms compared

• Physical gold (bars, coins): direct ownership, no counterparty risk, but storage and insurance costs.
• Gold ETCs/ETFs (e.g. Xetra-Gold): exchange-traded, easy access, but no direct ownership of the metal (depending on the product).
• Gold mining shares: leveraged exposure to the gold price, but additional company-specific risks.
• Gold savings plan: regular purchase of small amounts, using the cost-average effect.

You can calculate the melt value of jewellery or scrap gold directly — helpful before a sale or when valuing inherited pieces.

In brief

Gold combines unique physical properties with a role as a store of value and monetary metal that reaches back thousands of years. For investors it is less a yield instrument than a building block for protection and diversification — its price always mirrors confidence in other asset classes and currencies.