Why is gold often used for jewelry

Precious metals - an overview

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Since their discovery they have been enjoying themselves Precious metals a great appreciation. Gold and silver in particular have been used as a medium of exchange and currency or as a material for jewelry and relics for thousands of years.

Nowadays, industrial needs have been added to these uses. The industry primarily processes or uses silver and platinum metals in various products and processes.

Still stay Precious metalsIn its function as a store of value and a universal means of payment, gold in particular is an important investment opportunity - not only in times of crisis.

Precious metals general characteristics

Among the main representatives of the Precious metals include gold, silver and the platinum group metals, among others. Platinum and palladium. Their main property is their high resistance to corrosion, i. H. Precious metals hardly or not at all oxidize in the air. This is what distinguishes precious metals from other metals, such as B. iron. In addition, they have a low hardness and easy deformability and can therefore be processed easily. Precious metals are permanent, identical and freely divisible. They can be melted down again at any time and used again. These properties, as well as their naturally limited occurrence, have made precious metals viable means of exchange and currency in the past.

elementChemical symbolMelting pointboiling pointdensity
goldAu (= Latin Aurum)1064 ° C2970 ° C19.32 g / cm³
silverAg (= Latin argentum) 961 ° C2210 ° C10.49 g / cm³
platinumPt1768 ° C3827 ° C21.45 g / cm³
palladiumPd1554 ° C2960 ° C11.99 g / cm³

Gold has a high density and is amazingly soft and ductile. To make the yellow precious metal harder, it is alloyed e.g. B. with copper or uses the precious metals silver or palladium. Popular gold alloys for jewelry are rose gold and white gold.

Silver has the highest reflective properties and is the best conductor of heat and electricity of all Precious metals. Also, like gold, it is very soft and ductile. Silver has antibacterial properties, has an odor-inhibiting effect and is kind to the skin. To increase the degree of hardness, silver is usually alloyed with another metal, often copper. A special feature is the patina that silver forms due to the hydrogen sulfide content in the air. The precious metal turns rainbow-colored or black, depending on the storage location. With coins this can be a desired effect, with jewelry or cutlery a patina is undesirable.

Thanks to its hardness, platinum is more stable than gold and, thanks to its alloy with other platinum group metals, achieves a particularly high level of strength. When polished, it gets a high gloss.

Palladium is closely related to platinum, but much more reactive. But palladium also shares the property of Precious metalsnot to react with oxygen at room temperature. In finely divided form it is an excellent catalyst and for this reason it is preferred in the automotive industry.

The specification of the precious metal content of an object, for example a bar or a coin, is called the fineness. This is in per mille, i.e. H. noted in thousandths of the total weight. For many precious metals, 999 or 999.9 parts per thousand denotes the highest purity available in normal stores. Even higher degrees of purity can only be achieved with enormous effort.

A common unit of measurement for the fineness of gold is the carat (kt or C). In this case, the gold content in the alloy is given in divisions of 24. 24 carat gold contains 24 parts by weight of gold, although this is only possible in theory, as not all impurities in the precious metal can be eliminated for technical reasons.Therefore, one speaks in this case of a 99.9 or 99.99 percent gold content.

In precious metal coins and bars, the fineness is also referred to as fineness. The fineness of a coin corresponds to the ratio of the fine weight, i.e. the mass of the precious metal content, to the rough weight.

History of Precious Metals

Precious metals, especially gold and silver, were mined and processed thousands of years ago. The mining of gold has been proven since the early Copper Age. The oldest gold artifacts found to date are around 3,000 gold objects from the Varna burial ground in Bulgaria. These grave goods are dated to the period between 4,600-4,300 BC. Dated.

Precious metals received a high level of importance as a currency very early on. The first coins were made in the kingdom of the Lydian king Kroisos in the 6th century BC. Minted. In Asia Minor, he had coins of the same size and value marked with mint stamps. The Lydians used electron, an originally naturally occurring alloy of the precious metals gold and silver, as their coin metal. Also in the 6th century BC, the Greeks began minting silver coins - the ancient drachmas. The motifs of the first coins show images of animals and were minted by many Greek cities. Also in other cultures, e.g. B. in India, gold coins were minted as a means of payment. In Central Europe, the Celts probably coined from the 3rd century BC. Chr. Gold coins.

In Central Europe Charlemagne introduced a uniform silver currency around 792-793, in which 1 Carolingian silver pound (about 406.5 g) was equivalent to 20 shillings and these 240 pfennigs. Between the 12th and 14th centuries, the bracteates, also known as hollow pennies, became popular in many parts of the German-speaking area. These consisted of a thin sheet of silver and were embossed on one side. They offered a large area that left plenty of space for artistic motifs. Another silver coin that was created in the German cultural area in the 13th century was the groschen. This was more massive than the bracteate and was worth several times a penny.

The importance of others Precious metals as a currency grew in the Middle Ages through the crusades and the steadily increasing long-distance trade. In the 13th century, the Italian trading powers Florence and Venice began to strike gold coins, e.g. B. the gold guilder or the ducat. Precious metals also came to Europe via the newly discovered America. Spain in particular used the gold from Latin America to produce gold coins.

In the years 1897 and 1919 the most important market structures to date were created in London around the Precious metals To trade gold and silver. Although the gold price on the London Bullion Market has been determined since the 17th century, the process of gold fixing did not emerge until 1919. Its structures have changed only marginally up to the present day. The silver fixing is even older. This process dates back to 1897. The founding members of this trading process for the two precious metals included five participants, the best known of which is N M Rothschild & Sons. The London-based bank also took over the chairmanship of the gold fixing committee and held it until he left in 2004.

That experienced the greatest use in money circulation Precious metal Gold with the transition from bimetalism to the pure gold standard. The gold currency in circulation arose from the dualism of the precious metals gold and silver. H. only Kurant coins made of gold came into circulation. The gold coins of the German Empire, the British sovereign and the Swiss gold coins are known from this period.

Later they switched to the gold core currency and so banknotes and coins with a lower metal value were issued, which could be exchanged for gold at the monetary authority. This obligation to pay expired with the beginning of the First World War in 1914 in the warring states, in order to enable the financing of the war through money creation. In 1933 the USA broke away from the gold standard and prohibited private gold ownership in order to end deflation in the country by expanding the money supply. This measure was followed by, inter alia. Canada, the Philippines, Argentina and most of the Central American states.

After the Second World War, the Bretton Woods system created an international currency order that was determined by the US dollar. As part of this system, which was based on a fixed exchange ratio between the US dollar and all other currencies, the exchange ratio between the dollar and an ounce of gold was established. That rate was $ 35.

The US Federal Reserve (Fed) undertook to exchange the dollar reserves of other member states for gold at the agreed rate. This system ended with the decision of the US government in 1971 to unilaterally break the nominal gold peg of the dollar. The fixed exchange rates were then released in 1973.

The South African Krugerrand was minted for the first time in 1967. The gold coin has been an official means of payment since then, but was intended as an investment coin from the start. The Krugerrand is considered to be the first gold coin minted purely for investment purposes.

In 1975 the last silver coin, the 5 DM piece "Silver Eagle", disappeared from circulation in West Germany. Since gold coins had not been put into circulation in Germany since 1918 Precious metals obsolete in daily payment transactions.

Not all Precious metals have in the past achieved a significance similar to that of gold and silver. While the Egyptians used platinum as early as 3000 BC. The discovery of palladium dates back to 1803. When searching for gold, the Spanish in the 17th century saw platinum as immature gold and waste material. The only platinum coins in circulation were minted in Russia. From 1828-1845 platinum coins with a face value of 3, 6 and 12 rubles were produced. These were popular among Russian farmers because, due to the high melting point of platinum, they could be recovered intact from the ashes after a house fire.

The youngest of the four mentioned Precious metals, Palladium, was first used as a coinage metal in 1966. In that year, Sierra Leone made 100 coins from palladium from a commemorative gold coin. The first official palladium coin comes from the Kingdom of Tonga and is dedicated to the coronation of its king Taufaʻahau Tupou IV. The precious metals platinum and palladium are mostly used in industry.

Uses of Precious Metals Today

Global demand for precious metals in 2014 in tons:

Precious metalJewelleryIndustrial demandPrivate investorsOther demand
gold2,213 t400 t1,079 t466 t
silver 6,694 t18,504 t6,096 t1,888 t
platinum80 t 144 t4 t-
palladium 15 t 282 t1 t-

Sources: GFMS Gold Survey 2015, GFMS World Silver Survey 2015, GFMS Platinum & Palladium Survey 2015

Precious metals in the jewelry industry

Most of the gold extracted is processed into jewelry. In 2014, global demand in this area was 2,213 tons. This corresponds to a share of around 53 percent of total demand. The most important markets for gold jewelry are China and India.

Also the Precious metals Platinum and silver are popular materials for jewelry, even if the consumption is relatively lower than that of gold. Around 35 percent of the platinum in demand worldwide is used to make jewelry. Silver is in third place with a share of 20 percent of total demand; however, at 6,694 tonnes, the demand is much higher than that of platinum at around 80 tonnes. The bottom of the list of the four precious metals is palladium with a demand of around 15 tons in 2014.

Industrial use of precious metals

The industry only needs about ten percent of the gold mined annually. Dental fillings are a classic field of application. Besides, that will Precious metal used in the construction of electrical parts and devices (e.g. gold-plated connectors on circuit boards) and the production of optical devices.

Silver is a classic industrial metal. Around 54 percent of the precious metal extracted is used in this area. Silver is used in the electrical and automotive industries because of its high conductivity. Almost every car contains an ounce of silver. The aerospace industry and the manufacturers of solar systems also increasingly need the precious metal. It is also used in photography as part of image development. Due to its good reflective properties, silver is also used to coat mirrors. It also has an antibacterial effect and is therefore used in cosmetics and medicine. Many medical instruments and also special wound dressings are silver-coated and thus provide greater protection against infections.

As the Precious metals Silver and palladium, platinum has a wide range of uses within industry due to its properties - around 64 percent of annual platinum demand comes from this area. The noble metal is not only a component of vehicle catalytic converters, but also a catalyst used to produce nitric acid. Platinum is also used as a material for laboratory equipment because it does not produce flame color. Platinum can also be found in thermocouples, in melting pots for glass and in medical implants such as pacemakers.

Palladium is also used to build catalytic converters in automobiles. This branch of industry accounts for around 69 percent of global consumption. Palladium is also an excellent catalyst to accelerate chemical reactions and for this reason it is indispensable in chemistry. Palladium is also a common material for dental implants and medical instruments. The industrial share of the total palladium demand is approx. 94 percent.

Physical possession of the precious metals for investment                                          

Compared to the investment demand of others Precious metals gold is the most popular investment property. In 2014 investment demand was 1,079 tons. This corresponds to a share of 26 percent of the global gold demand. The preferred form of investment was gold bars with a quantity of 829 tons. The proportion of gold coins was significantly lower at 251 tons. Investment gold also serves the central banks as a currency reserve. The country with the largest gold holdings is the USA with around 8,100 tons, followed by Germany with 3,386 tons of gold. In April 2014, according to the International Monetary Fund (IMF), the total amount of global gold reserves was 31,820 tons.

That too Precious metal Silver is popular with investors around the world. In 2014, the demand for silver in the form of coins and bars was 6,096 tons. This corresponds to a share of approx. 18 percent of the total demand.

In contrast, the investment demand of the Precious metals Platinum and palladium. In 2014, the share of this area in global platinum demand was around two percent or four tons. Only the investment share of palladium was even lower, with demand of around one ton in 2014. This corresponds to a share of 0.5 percent of global palladium demand.

Extraction of precious metals

Global mine production of the four precious metals in 2014 in tons:

Mine production worldwide
3,133 t 27,293 t146 t188 t

Sources: GFMS Gold Survey 2015, GFMS World Silver Survey 2015, GFMS Platinum & Palladium Survey 2015

Like all Precious metals gold is one of the elements that are very rare on earth. The gold content in the earth's crust averages around 4 grams per 1,000 tons of rock, but it varies depending on the region. China has been the world's largest gold producer since 2008. In 2014 the country mined around 462 tons of the yellow precious metal. Behind China is Australia with a production volume of 273 tons and Russia with a production of 262 tons of gold. The USA was just behind in 2014. They lifted 205 tons. Approximately 172,000 tons have been extracted since gold mining began. This amount of precious metal corresponds to a cube with an edge length of 20 meters.

Like most of them Precious metals gold occurs for the most part indigenous on earth, d. H. in elementary form. In general, when looking for gold deposits, a distinction is made between primary deposits, also known as mountain gold, and secondary deposits, also known as washing or soap gold. The deepest gold mine in the world is located in South Africa and reaches depths of up to 4 kilometers below the surface of the earth.

When gold is extracted, the gold components are mechanically removed from the rock. Directly visible gold finds in the form of nuggets or gold dust are rarities. A gold nugget is a gold compound that originated in nature. Nuggets were formed by erosion over millions of years. They occur in secondary mineral accumulations in sediments such as sand and gravel. Most of the time, however, the gold content in the rock is distributed over small particles and is filtered out using various methods. The best-known processes are cyanide leaching and the amalgam process, both of which are associated with high pollution and risks for the environment.

The Precious metal Most of the silver falls off as a by-product of the breakdown of other metals. Silver ores often occur in nature in connection with gold, lead, zinc or copper ores.Every year around 25 percent of global silver production is extracted from pure silver mines. In 2014, global silver production was 27,293 tons. The most important mining areas are in North and South America and Asia. In recent years, Mexico was the country with the highest silver production, in 2014 a total of around 6,000 tons. This was followed by Peru with 3,779 tons and China with an output of 3,568 tons of silver. Poland is the largest silver producer in Europe. In 2014 the country extracted 1,263 tons.

In relation to platinum and gold, silver is around 20 times more abundant in the earth. Scientists estimate, however, that the global silver deposits are only sufficient for about 29 years. It is to be expected that silver will become increasingly scarce over the next few decades. Because of this finiteness, efforts are made to an increasing extent, silver as well as others Precious metals to recycle.

The Precious metals Platinum and palladium are now only mined at great expense in a few regions of the world. Today, platinum is for the most part extracted as a by-product in copper and nickel production. The worldwide production volume in 2014 was approx. 146 tons. The world's largest platinum deposits are in South Africa. The country is also the largest platinum mining nation. In 2014, 95 tons of the precious metal were mined there. The second largest platinum producer in the world is Russia with a production volume of 22 tons in 2014. Platinum producers also include Zimbabwe, Canada and the USA.

Palladium is twice as abundant in the earth's crust as gold and platinum. The Precious metal is now mostly extracted from nickel, lead, silver and copper ores. In 2014, Russia was the largest production nation for palladium with 83 tons. South Africa follows in second place, producing a total of 59 tonnes. At the same time, the Cape of Good Hope is home to the world's largest reserves of the platinum metal group (including platinum and palladium). The country has reserves of over 63,000 tons. This corresponds to around 95 percent of the global deposits. After Russia and South Africa, Canada, the USA and Zimbabwe are among the notable sponsoring nations. However, the annual production volume of these countries is nowhere near as high as that of the two frontrunners. Together, the three countries achieved a production volume of around 39 tonnes in 2013. The total output of palladium in 2014 was around 188 tons.