Buffett calls gold "a chicken that can't lay eggs". Why is gold so expensive? What's the use?

in finance •  3 years ago 

Speaking of gold, the golden color will appear in our minds. Ancient palaces and official households often used gold as decoration or as important parts, because it symbolized wealth, power and status.

As a leader in the investment industry, Buffett, also known as the "world stock god", never invests in gold. He calls gold "a chicken that won't lay eggs" and believes that gold can neither continue to create new value in quantity. There is no interest in holding it for a long time, and investors can only expect others to buy it at a higher price.

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But why is gold so expensive? What's the secret to getting people's attention? Many people may not understand the question of where does gold come from.

How is gold formed?

Gold is known as the "king of metals", and historians believe that gold has a history of at least 5,000 to 6,000 years.

Gold is a natural product that exists in a free state in nature. It is an element produced by qualitative changes caused by a backlog of free energy in the universe. It cannot be synthesized artificially.

The process of gold formation is related to crustal movement and geological changes, and the enriched gold elements become gold deposits. From the category point of view, the naturally formed gold mainly includes: rock gold deposits, placer gold deposits, and associated deposits.

The formation of rock-gold deposits starts from ancient times. The gold elements follow the cracks created by volcanic eruptions, from the core to the mantle and crust, and then under the action of marine deposits and regional metamorphism, they constituted the original source of gold deposits. .

The powerful force continues to play its role, causing the crust to deform into folds and expose the sea surface. The gold material gradually completes its activation, migration and enrichment process, thereby forming rock gold.

Placer gold deposits are the world's main gold production deposits. They are formed by weathering and mechanical enrichment of gold-bearing rocks. Mineral gold deposited in rock fractures with hot springs gushing underground is also one of the main sources of placer gold.

Associated gold in associated deposits is generally large in content and difficult to mine. The main reason is that in addition to the associated minerals, the mineral deposits also contain other minerals with similar chemical properties and the same material source, and the possibility of independent mining is extremely low.

The discovery and use of gold

Gold is like a treasure gifted by nature, and its existence has the possibility of being discovered by human beings. Gold materials can be mined, smelted, refined and other steps to obtain gold of different purity.

As early as 4000 BC, gold smelting technology has been mastered by intelligent humans. There are three main discoveries of gold: "from the rocks", "from the water and sand", and "the one who digs the well on the flat ground".

Specifically, the rocks in the rock gold deposits are oxidized, weathered, and eroded by water, and slowly become sandy soil, which is separated from the gold to a certain extent. The flow of river and sea water displaces the gold-carrying materials and deposits them in the gentle water flow. At the place, placer gold was formed.

Placer gold of different particle sizes is distributed in the low-lying areas of the river bed and is more easily found by gold prospectors. The recovered alchemical raw materials are subjected to physical and chemical methods to remove impurities and metal residues in a high-temperature environment.

It will be further refined and refined to make the gold content reach the 99%-99.9% purity required by the market before being sold, waiting for further processing and use.

Why is gold so valuable?

As the saying goes, "The rare thing is precious". For a long time, gold has been regarded as a precious metal worth investing in because of its rarity.

The preciousness and rareness of gold and people’s appreciation for it are greatly manifested in allusions, poems, songs, and secular slang, such as "golden glitter", "there is a house of gold in the book", and "there is gold everywhere." Can shine" and so on.

The reserves of gold in nature are limited. Studies have shown that the content of gold in the earth's crust is about one part in 100 million, and the content in seawater is about one part in 100 billion.

Some gold deposits are buried deep in the internal structure of the earth, and existing technologies are almost impossible to mine. Even if it may be developed and utilized in the future, it will take a long period of time, possibly as long as several billion years, to expose the buried gold material to the shallow crust. In summary, it is not difficult to understand why gold has always been so valuable.

Of course, the important reason why gold is valuable lies in its diversified use, fits application in different scenarios, and is inextricably linked to people's lives.

What are the uses of gold?

In the early days, gold was used to make jewelry and coins, and it was circulated as currency in the market. Now it has been widely used in many fields.

  1. In the industrial field: Based on the characteristics of extremely strong ductility, anti-corrosion and anti-oxidation stability, strong ability to reflect infrared rays, and good electrical and thermal conductivity, gold has become an important part of the aerospace industry in the manufacture of electrical instruments and key components. Material.

The so-called "real gold is not afraid of refining by fire", in terms of processing, gold also shows its advantages in process manufacturing. Certain purity of gold is transformed into "ultra-thin gold foil, micron gold wire, and gold powder" after deep processing.

It is said that 0.5 grams of gold can be stretched into a gold wire with a length of 160 meters. The ductility is only one of them. The easy plating of gold can make it welded to the surface of ceramics, glass and other metals under pressure. In addition, finished products made of gold also include superconductors, organic gold and so on.

  1. In the medical field: due to its chemical stability, easy casting, and no physiological toxicity, gold is also used to make dental materials and acupuncture materials to assist medical treatment. According to the records of medical history books such as Compendium of Materia Medica and Renew of Materia Medica, gold also has medicinal value.

  2. In the financial field: Gold is generally not affected by market fluctuations, and has always had a good value-preserving function. It plays a role in transaction payment and investment hedging. Even in a special period when economic operations are not stable, the price of gold can stabilize within a certain range, or even rise against the trend, so many countries are strengthening their gold reserves.

In many cases, gold is synonymous with luxury. As one of the first rare metals discovered and exploited by mankind, gold has continuously penetrated into people's lives, showing its unique value.
In spite of the changes in the world and the changing of things and scenes, gold still continues its charm eternally. In the future, as mining and processing technologies become more mature, gold may have more applications, showing its charm in different fields.

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