Beyond Jewelry and Bars: Gold’s Industrial Applications
Gold has attracted investors for thousands of years, especially as investing continues to become more mainstream. Precious metals and other assets are more accessible than they have ever been, and with inflation continuing to hurt fiat currencies, many investors are putting their cash into gold.
However, gold isn’t just a store of value that is meant to be collected. There is more to this precious metal than jewelry and storing enough of it to withstand inflation. You can find gold in everyday products and services, and some industries rely on the precious metal to provide high-quality customer experiences.
While most gold investors focus on gold bars and jewelry, this guide will unveil some of gold’s more practical uses in society.
Electronics
Smartphones, computers and tablets are some of the electronics that contain gold. The precious metal is a key component in semiconductors that power up these devices and act as memory storage.
However, there isn’t enough gold in any of these devices to justify searching for it. A desktop computer, for example, only contains 0.007 ounces of gold — not enough to get a strong return on investment from your computer by finding the gold components within. But given large-scale production, computers do contain enough to boost gold’s demand.
For gold investors, tracking demand for gold in the electronics industry can be aided by monitoring how the stocks of smartphone and laptop manufacturers, such as Apple and Microsoft, perform. If these companies generate higher sales for their products, gold could gain some momentum.
Automobiles
Smartphones and laptops are far from the only products that contain gold. Chances are you can find the precious metal in your car. Gold is in the engine control unit (ECU) of internal combustion engine vehicles. But you’ll find it in other areas as well.
Gold helps to reflect heat away from heat-sensitive parts of a vehicle, and you’ll also find the metal in your car’s safety systems. Gold allows airbags and other safety mechanics to activate sooner if they are needed. Every second can count in an accident, and gold’s incorporation in vehicles has saved lives due to quicker reaction times.
The U.S. automobile industry is currently valued at $1.51 trillion and is projected to grow by a compounded annual growth rate (CAGR) of 3.50% each year from now until 2032. This metric does not include international vehicle markets, which will create more demand for gold.
Dentistry
Gold is a common resource for dental fillings and crowns, and it isn’t just because people like the way it looks. The precious metal is more durable than many other options. It is also a soft mineral, which makes it both pliable and easier on gums and oral tissues.
Brushing your teeth at least once per day can minimize the likelihood of needing a dental filling or a crown. However, many people end up needing this service as they get older. Gold fillings and crowns reduce the pain from the procedure and how you feel afterward.
Healthcare
Like other industries, healthcare has evolved over the years. A wide range of medical devices, such as pacemakers, blood pressure monitors and defibrillators, help practitioners diagnose patients, track their progress and determine the next steps. Gold is a staple in each of those devices.
Medical devices remain in heavy demand, and the industry is also growing at a nice pace, currently valued at $13.31 trillion and expected to maintain an 8.27% CAGR from now until 2031. This growth rate suggests more medical devices will be used and produced, which is good news for gold investors as the precious metal will see increased demand for those applications.
Aerospace
Gold is a vital component in every aircraft. The precious metal is in rocket engines, electrical connectors and other parts of the plane. Gold also acts as an insulator, helping to maintain ideal temperatures within the airplane as it ascends into colder layers of the atmosphere.
Aerospace applications for gold aren’t limited to airplanes. Gold is more durable than most precious metals, which helps it endure various environmental conditions. Because of this, the metal is used in satellites to shield them from radiation, temperature fluctuations and other outside forces.
The aerospace market is projected to maintain a 7.2% CAGR from now until 2033. It is currently a $662.4 billion market, and that growth should be reflected with increased gold demand going forward.
How is gold primarily used?
Gold is mostly used in luxury products and as a unit of value. More than 90% of gold is used in jewelry, stored in central banks or held by investors. The remaining gold supply is allocated across various industries, like those previously discussed.
Even though gold is mostly used for jewelry and investments, its impact in multiple industries cannot be ignored. Most companies need gold — but not large sums of it — to provide products and services. For instance, most satellites only contain around one to three ounces of gold. Companies have become increasingly efficient with how much gold they need to achieve their desired results, but even with this efficiency, gold remains in high demand across numerous verticals.