Gold

Gold is a bright yellow metal, dense, soft, and the most malleable and ductile of the elements. It is also among the least reactive, standing second only to platinum in the reactivity series, and that inertness is the foundation of everything else about it as a commodity. It occurs most often as the free element — nuggets and grains in rock, veins, and alluvial deposits — in solid solution with silver as electrum, naturally alloyed with copper, platinum, and palladium, included within pyrite, and less commonly as gold tellurides.

Because it does not corrode or react, gold is never consumed, and that one fact distinguishes it from every other commodity on this list. Essentially all the gold ever mined still exists: some 201,296 tonnes above ground as of 2020, which would form a cube roughly 21.7 meters on a side. Annual mine production is a small fraction of that accumulated stock. Gold is therefore the only commodity here whose entire history of production remains available for sale, and its price is set not by the cost of production or the rate of consumption but by the willingness of existing holders to go on holding. That is what makes it behave as a monetary asset rather than as a commodity in the ordinary sense.

Two solvents govern the trade. Gold resists most acids but dissolves in aqua regia, and it is insoluble in nitric acid alone, which dissolves silver and the base metals — the basis of refining, of assay, and of the phrase "acid test." It also dissolves in alkaline cyanide solutions and in mercury, forming an amalgam in which the gold is merely a solute rather than a reaction product. Each of those reshaped the industry. Mercury amalgamation carried New World gold and silver for three centuries, which is what made the quicksilver monopolies economically a tax on precious-metal production. And the MacArthur-Forrest cyanide process, patented in 1887 by John Stewart MacArthur with Robert and William Forrest in Glasgow and first used commercially on the Witwatersrand in 1890, made low-grade and pyritic ore workable where the methods of the 1880s had failed; it recovered gold up to 96 percent pure and is still used in roughly nine-tenths of world production. The Rand's expansion had stalled on ore it could not treat, and the process unstalled it.

Gold was coined from Lydia onward and underwrote monetary policy through the long nineteenth century as the gold standard. Circulating gold coin largely ended in the 1930s, and the last formal link between a currency and the metal was severed by the Nixon measures of 1971. What is striking is what did not then happen. Silver, demonetized in the later nineteenth century, lost its principal use. Gold stopped being money and remained the reserve asset — which is why roughly forty percent of annual consumption is investment, and why central banks still hold it.

Of new gold produced, about half goes to jewelry, forty percent to investment, and a tenth to industry. Its chief industrial use is corrosion-resistant electrical connectors in computing devices, where inertness rather than conductivity is the point; beyond that, infrared shielding, colored glass, gold leaf, dental restoration, and auranofin, a gold compound used against rheumatoid arthritis. In 2023 the largest producer was China, followed by Russia and Australia.

The boundaries follow the metal through its forms. Coin and bullion held as money are money, while the metal is here. Electrum and doré carry both gold and silver. Gold recovered as a byproduct of copper mining is here and the copper is copper; natural alloys with platinum and palladium carry both. The mercury of an amalgam is mercury and the cyanide of a leach is an industrial chemical, while the gold is here. A set stone is a gem material and a finished piece of jewelry or plate is a manufactured good. Connectors and bonding wire are here and the device built with them is electrical equipment or a semiconductor assembly. Gold-ruby glass is glass and the gold coloring it is here. Auranofin is a pharmaceutical drug. The date is c. 4500 BCE, on the Varna necropolis.