The uses of gold are many and varied. So to buy gold for investment purposes is not the only use to which it is put.
Gold has a number of unique properties which make it ideal in industry and perhaps contributes to its value thereby.
Gold is resistant to corrosion, has excellent electrical conductivity, is ductile (which means it can be drawn out to a thin wire) and malleable (able to be flattened out extremely thin), reflects infra red and has excellent thermal conductivity properties.
It is used extensively therefore in a wide range of manufacturing such as in electronic products like computers, telephones, cellular phones and home appliances. Even wheelchairs make use of gold. Gold is used very much in electrical contacts and almost all circuit boards contain a quantity of gold in the form of smaller that the thickness of a hair wires and other components.
Golds reflective powers are used successfully in the space industry such as satellites and spacecrafts where it is used for protection against solar radiation. For example, to protect the onboard computers in the Galileo space probe from short circuiting as a result of heavy bombardment, NASA developed a Heavy Ion Counter (HIC). This counter contains silicon wafers with gold electrodes that detect the heavy ions as they penetrate the wafers. Use of the HIC allows NASA engineers to monitor the functioning of onboard computers and make adjustments when necessary.
It continues to be used in medicine due to being biologically inactive and is a vital tool in medical research.
This means that the demand for gold is ever increasing, not only for gold rings and other jewelry accessories but also for coins bars and industry.
This makes it an excellent hedge against inflation as well as recessions (a time when gold traditionally increases in value compared to the dollar). The result being that gold continues to be in demand and the value continues to rise.
These prolific uses of gold, therefore, contribute in no small way to the stead increase in the value of gold and are an extra boon for the gold investor who is keen to buy gold.