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The vital role of gold in technology

Technology is transforming the way we live, work and play, changing almost every aspect of our world, from industry to financial services to healthcare. Gold plays an integral part in this societal shift.

Over the past decade, the technology sector has accounted for more than 380 tons of gold demand annually, a significant figure in itself and almost 13% ahead of central bank net purchases during the same period.

Yet gold’s role in this vibrant and growing industry is broadly unrecognised and often misunderstood.

Our latest edition of Gold Investor focuses on technology, analysing its current use and future potential across a range of applications.

To date, gold has primarily been associated with electronics used in devices such as phones, cars, televisions and hospital monitors.

AUTHOR: Aram Shishmanian,
CEO World Gold Council

In the first part of this decade, electronics demand faltered as manufacturers sought less costly alternatives.

Now, however, demand is rising again, testament to its unparalleled properties of high conductivity, resilience and flexibility.

Even as electronics demand rebounds, a number of other forward-thinking industries are turning to this commodity.

In healthcare and biotech, there is growing excitement about the potential of gold nano-particles in such wide- ranging areas as diagnostic testing, gene therapy, skin reconstruction, and antiviral drug production.

And, as Canadian biotech firm Sona Nano-tech highlights, gold nano-particles may soon play an integral role in cancer treatment too.

Speciality chemicals and sustainable technologies company Johnson Matthey has pioneered the use of gold as a catalyst in the production of polyvinyl chloride (PVC).

This would replace mercury, which is extremely toxic and associated with serious health issues, when not handled with exceptional care.

Using gold therefore, could prove highly beneficial and Johnson Matthey is actively working to drive this change.

Its contribution to the technology sector underpins its value in the modern world and its ongoing role as an industrial commodity.

However, the commodity remains a valuable financial asset too. Dr Andrew Sheng, distinguished fellow of the Asia Global Institute, advocates that central banks should increase their gold holdings, as the world moves from an international monetary system dominated by the US dollar to a multi-polar currency system.

Sheng points to its multiple benefits as an asset that delivers long-term returns while reducing risk and increasing liquidity.

Brunello Rosa, economics expert and CEO of Rosa & Roubini Associates, also subscribes to the benefits of it within a diversified portfolio.

Assessing the political situation in Italy, he predicts that volatile times lie ahead and suggests that it could be a useful asset to hold in such an environment. And Matthew Turner of Macquarie also points to the stability in recent years – in stark contrast to many other asset classes.

Across the world, gold is increasingly entering the mainstream and becoming part of the global dialogue among policy-makers, opinion former’s and leading institutions.