There are many precious metals available for public consumption yet gold still has a special place in the hearts of so many people. This precious metal has been utilized for various purposes such as in the creation of art, the making of coins and jewelry. Gold is often found in the form of grains hidden in rocks as well as alluvial deposits. This particular metal has bright shine and it’s dense. At the same time, it’s also very ductile. It has an eye-grabbing yellow color and it shines beautifully. A lot of the metal’s characteristics are naturally preserved as they don’t get affected much by chemicals and humidity. The more elaborate description of this precious metal is described as below:
1. General description.
The chemical symbol for gold is Au. 79 is its atomic number. It’s categorized as a type of transition metal. It weighs approximately 196 g.mol-1 (atomic weight). It has its own unique electronic configuration as well.
2. Physical description.
Gold has a high density and in-room temperature it weighs around 19.3 g.cm-3. Its melting point can be measured through 3 different temperature reading options. Unlike water, this precious metal has a very high boiling point, whereby it needs to reach at least 2856 degrees Celsius to start boiling. It fuses and vaporizes at 12.55 kJ mol-1 and 324 kJ mol-1.
3. Atomic description.
Gold has its own unique states of oxidation. Based on the Pauling scale its electronegativity is about 2.5. It’s atomic, covalent and Van de Waals radius are around 144, 136 and 166 picometres. Released energy from ionization is around 890 kJ.mol-1 (1st) and 1980 kJ.mol-1 (2nd).
Gold is actually a word originating from ‘gold’ picked from the old Anglo-Saxon word that brings the meaning of ‘yellow’. ‘Au’, gold’s chemical symbol, is taken from the Latin word ‘aurum’ which means gold. The actual moment when this precious metal was first found is still unknown. Some claimed it to be 1848 in California. However, it was discovered that gold was widely used during the ancient era of the Egyptians and Greeks, to name a few.
Gold plays a big role in society as it is a symbol of value and wealth.
Apart from silver and copper, gold has been used a lot in the making of coins. This precious metal has been used as an item of exchange or as a method of payment. It is measured using gram and troy weight. In order to identify the percentage of this precious metal in an item, carat is being utilized as the main method of measurement.
The price of this particular metal depends highly on current market value, and the benchmark price is determined on a daily basis on the London market. The changes in price occur twice in a day, i.e. in the morning and afternoon.
Last but not least, the price of this precious metal is fixed by the Nova Scotia bank, HSBC and Barclays Capital, to name a few. London Gold Market Fixing (Ltd.) and its members are responsible for coming up with the price-fixing procedure.
What is Gold Standard and Its 3 Different Types
Many countries have been defining the gold standard as a monetary system whereby the currency used is based on a fixed amount of (Au). In this monetary system, cash and deposits in the bank can be exchanged into gold and the price is fixed. Up to now, there are 3 common types of standard and they’ve been practiced since the 1700s. These are known as the gold specie, gold bullion standards, and gold exchange. To know a bit more about these three different standards a brief explanation is included below:
1. Gold Specie.
In this particular gold standard option, the currency unit has a direct connection with the circulated gold coins. In other words, the unit of currency is connected to the unit of value of each different gold coin. Secondary coinage with a lower value than gold uses the same rules as well. The presence of the gold specie standard was detected in the era of medieval empires. The Byzant (Greek) and the British West Indies are some of the gold standard examples. However, this type of standard is rather an applied system as it’s not formally established. It origins from Spain and it’s known as the doubloon. In 1873, the U.S. legally adopted the system and American Gold Eagle is used as a unit.
2. Gold Exchange.
This particular gold standard only involves the circulation of coins valued less than gold, for instance, silver. The authorities tend to impose a fixed rate for a gold exchange on countries that are using the gold standard. Many countries choose to peg their currency units to the gold standard in the U.S. and U.K. For instance, the Japanese, Mexican, and Filipino choose to exchange their silver to USD at the price of $0.50 per unit.
3. Gold Bullion.
This type of gold standard sells gold bullion via fixed prices based on demand. This method of trading was first carried out by the Parliament of the British in 1925 whereby it resulted in the voidance of the gold specie standard. In 1931, the U.K. government made a decision to banish the gold bullion standard on a temporary basis to curb the excessive flow of gold way past the Atlantic Ocean. The same year witnessed the ending of the gold standard.
The utilization of the gold standard has brought about several advantages. One of them is that the power of determining the occurrence of inflation within the country is not totally given to the government. In other words, inflation can be curbed by preventing the issuance of excessive paper currency done by the government. At the same time, the exchange rates will develop a fixed pattern whereby global economic uncertainties can be reduced at a great level. However, just like many other monetary systems, the gold bullion standard has its own set of disadvantages as well. It’s believed that it might not be able to stabilize the economy during depressive financial condition as it might cause the monetary policy to become ineffective. The belief makes sense, and a lot of economists are afraid that their theory would come true. In the gold standard, the availability of (Au) is the sole determinant of the availability of money.