What Makes Gold a Valuable Commodity?

Why is gold such an important commodity compared to other metals? The traits of ductility, malleability, quasi-indestructibility, and rarity can help you understand where gold derives its value:

  • Ductility: Gold is a very ductile metal. In metallurgy, ductility measures how much a metal can be drawn out into a wire. For example, 1 ounce of gold can be converted into more than 50 miles of gold wire! This gold wire can then be applied in electronics and used as an electric conductor.

  • Malleability: Pure gold (24 karat) is a very malleable metal and is prized by craftsmen around the world who shape it into jewelry and other objects of beauty. One ounce of gold can be transformed into more than 96 square feet of gold sheet!

  • Quasi-indestructibility: Gold has high resistance levels and doesn’t easily corrode. Corrosive agents such as oxygen and heat have almost no effect on gold, which can retain its luster over long periods of time (think thousands of years). The only chemical that can affect gold is cyanide, which dissolves gold.

  • Rarity: Gold is one of the rarest natural resources on earth. Most people don’t realize this, but only about 150,000 tons of gold have ever been produced since humans first began mining gold more than 6,000 years ago. To give you an idea of how little that is, all the gold in the world wouldn’t even fill up four Olympic-size swimming pools!

    And because most gold is recycled and never destroyed, a majority of gold is still in use today. About 15 percent of gold is recycled every year.

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