Harnessing the Power of Gold
By Isabelle Lee and Nick Fouriezos
The lust over its glimmer, durability and scarcity has long enchanted a humanity that’s begged, borrowed and stolen to get its hands on this malleable metal. From ancient myths extolling its sacred nature and promises of immortality and power to new golden calves capable of conferring overnight riches, gold, in the face of our increasingly digital world, has reached a crossroads. One that has us wondering: Will it — can it — survive? Today’s Daily Dose dives into gold in all its mesmerizing forms to see whether it’s still worth the glory.
its shifting economics
Is gold still a safe bet, or is its gleam being replaced?
To the Moon? The price of gold is currently headed for this year’s highest levels, although it remains below last year’s pandemic panic peak above $2,050 an ounce. On Friday, gold was trading above $1,900 per ounce, and some experts expect it to climb to $1,950 an ounce next week. What drives the price of gold? “The real-30 year treasury yield is the primary driver,” Jesse Felder, founder of The Felder Report, tells OZY. When dark clouds hover over an economy, investors often flock toward treasury bonds, seen as safe investments. But that surge in demand for these bonds leads to a crash in treasury yields, as has happened in recent months. “Should it [treasury yields] stay there, gold prices could soon break out to new, all-time highs,” he explains. That’s because low treasury yields push investors toward the next safe investment, gold, driving up its prices. The largest caveat to the surge? This Friday’s U.S. employment data. If the numbers beat expectations, the price of gold could fall due to the fear that the Treasury might rein in stimulus efforts again to avoid inflation.
Good Old Gold. One of the reasons the price is climbing could be the growing anxiety around crypto-volatility. Both crypto and gold are seen as “stores of value,” but if crypto is less stable than the price of gold, then it might be riskier to hold your assets in crypto versus in gold. Gold’s biggest advantage over crypto is that the price is much less volatile, but it offers less return on the flip side of the virtual coin because of its steadier value. Though, reading about the wild swings in Bitcoin is enough to make you want to go full Ron Swanson and bury your gold in the woods.
Crypto: The New Gold? At OZY Fest, CNBC Mad Money host Jim Cramer noted a new strategy: trading gold for Bitcoin. After years of placing 10% of his investments in gold as a hedge against inflation, Cramer now believes in keeping 5% in gold and 5% in Bitcoin. “People believe that the United States is printing money … but bitcoin is not printing bitcoin,” Cramer said, after the U.S. spent more than $1 trillion on COVID-19 pandemic relief. Bitcoin has an (artificially) limited inventory, which he said means it can be treated as a “precious” stock, which has made Bitcoin “more valuable, in the same way that gold is hard to find.”
Lemme Tell You About NFTs Some are calling it “a new digital gold rush.” Creators are increasingly putting up their products as non-fungible tokens, unique digital assets that cannot be replicated or stolen because they’re recorded on Ethereum’s blockchain ledger. One digital artist, Beeple, sold his work for nearly $70 million in the first ever NFT auction by Christie’s. As with gold and crypto, an NFT’s scarcity confers its value. For that reason, an original Banksy print called Morons, a lampooning of the auctioneer market, was able to sell as a digital token for $380,000 in March even after it was completely burned in a livestreamed video.
Hedged Against Inflation Traditionally, gold has been a haven for get-rich dreamers. Now? It’s more of a play-it-safe bet to hedge against risk. However, if the world continues to move more digital than physical, the preciousness of gold may depreciate. But gold has demonstrated its worth over the centuries, with the value of the limited resource increasing fivefold over the past 20 years, according to GoldPrice.org. That’s some serious value, even if it’s been earned over time. Ironically, this makes gold an asset the original gold rushers would have eschewed for a faster fix.
modern gold diggers
Those searching for gold … and those redefining its very meaning.
Pandemic Panners Some gold miners flouted Canadian travel restrictions to travel to the Yukon territory, hoping to make their fortune as the value of gold skyrocketed during the pandemic. Around 400 Indonesians were arrested for illegally mining gold in Kalimantan, with others also risking imprisonment and death to capitalize on gold’s increased value. And a new gold mine may be sprouting up at the Stibnite Gold Project in Idaho, with Canadian company Perpetua Resources, formerly Midas Gold, pitching it as both a mining and restoration project. Environmental groups are calling the “restoration” aspect of the plan fool’s gold, and also oppose the company’s intent to use cyanide to extract gold from the site at Salmon River, where there was a gold rush in the late 1800s. And in West Africa, illegal gold mining is fueling human trafficking and proving deadly.
Renewable Gold? In 1864, a hot spring containing nearly 10 times as much lithium as any previously discovered spring was found in an English mining town in Cornwall. But sans commercial uses, the lithium-rich liquid was left bubbling. Then, in the fall of 2020, a nearby site was also confirmed to have some of the world’s highest lithium grades. Now, lithium is in high demand, used in everything from smartphones to electric vehicle batteries, and harvesting it from hot springs is much more environmentally friendly than mining the element from hard rock. Other precious metals and rare-earth metals crucial to modern tech are also spurring an arms race in the Arctic, with Russia, China and the United States vying for an advantage.
Creative License Artists are mining the timeless gold concept for new truths. In the 2008 sci-fi goth rock film Repo! The Genetic Opera, the absurdly wealthy (and undeniably dying) founder of an organ transplant company sings about how gold is the only thing with permanence: “Flesh is weak/Blood is cheap,” Rotti Largo sings, “Gold, it makes the world go ‘round.” Sanjena Sathian, a former OZY editor whose debut novel Gold Diggers released to critical acclaim in April, molds a myth about the son of Indian immigrants to the U.S. who greedily drinks stolen gold to assume the ambitions of the gold’s original owners. The idea isn’t divorced from historical reality: In his Holocaust account, Night, Elie Wiesel wrote about the demoralizing ways Nazis stole gold from Jewish prisoners and, in doing so, robbed them of hope. When his own golden crown was saved due to the execution of the camp dentist, “I felt no pity for him,” Wiesel writes. “My gold crown was safe. It would be useful to me one day, to buy something, some bread or even time to live.” Gold carries with it weighty dreams.
mining for mythology
More than most substances, gold has accumulated grandeur over the centuries.
Genesis The scientific theory regarding gold’s arrival? As poetic as any creation myth. Like most precious metals, gold was created after the Big Bang in the hearts of stars in a process called nuclear fusion. Gold wasn’t formed until the first stars began dying, forming supernovas that then exploded gold atoms and other debris across the universe. A more modern take suggests gold can also be formed through the collision of two “neutron” stars — stars the size of eight suns that have collapsed and been condensed into the size of the average American city, a process similar to “cramming Mount Everest into a cup of coffee,” as science journalist Tibi Puiu writes in ZME Science.
Sacred Substance Given the science, various early civilizations, particularly the Aztecs and Incas, weren’t far off in calling gold the “tears” or “sweat” of the sun, which represented their most sacred deity. Its rare fluidity — from its liquid form to its ability to be molded into shapes — makes the analogy even more apt. In Hindu mythology, gold is considered the soul of the world: the personified creator was reborn from a golden egg as the lord Brahma, who was also known as Hiranyagarbha, a Sanskrit term also meaning “golden womb.”
Elixir of Immortality
The Greek myths are full of golden references, from King Midas to the Golden Fleece stolen by Jason … who also possessed the Golden Apples from the Garden of the Hesperides. The apples granted immortality and had been guarded by Ladon, a hundred-headed dragon. It’s suggested that as much as 2,000 years ago, the Chinese believed gold could help them live forever, although their alchemists often made the mistake of including toxic minerals like mercury and arsenic in their brews. In the 16th century, French nobles drank gold daily to try to prevent signs of aging — doing so despite their European neighbors having deliberately used it to kill people during the Spanish Inquisition decades before.
There are nuggets all around us, hidden in plain sight.
Shocking Quality Some computers, particularly older ones, contain up to $10 worth of gold in their circuitry. That’s because gold serves as a particularly strong conductor of electricity: televisions and smartphones, plus older cameras and radios using gold are known for their consistency. While two cheaper alternatives — silver and copper — are slightly better conductors, gold is often preferred because of its significantly higher resistance to corrosion.
Fine Dining Want to flaunt your wealth? Try eating it. Gold is a good garnish because it’s flavorless and indigestible, so it passes right through your body and thus is not toxic. (Edible gold should be around 24 karats: if not, it may be mixed with other, harmful metals.) Ceremonial foods covered in gold dust were consumed by the ancient Egyptians and Chinese dating back to at least 2,000 B.C. Europeans enjoyed meals with gold leaf during the Middle Ages: the city council in Padua, Italy, even passed a law in the 16th century forbidding more than two gold-flecked courses per wedding as neighbors tried to outdo each other. And now, many restaurants, from Washington to Miami to Las Vegas offer edible gold dishes.
Health Care As far back as the 1920s, those suffering from arthritis were often prescribed gold salt injections in their buttocks to reduce inflammation and stiffness. Doctors today have mostly moved away from the practice because of side effects that included hampered antibody production. But other uses for the precious metal are still being discovered. For example, NanoLipo is a “a new fat-melting procedure” that injects heated golden nanorods into fat calls. The cells burst and are then removed by needle. One 2018 study found that the technology “showed many advantages” to other systems and “may be promising in facilitating fat removal,” although it’s unclear whether it has yet been used broadly in human clinical trials.
Nanoparticles, Big Possibilities Researchers are increasingly seeing broad potential for gold nanoparticles in a number of fields. In solar panels, star-shaped gold particles could improve energy storage by converting hydrogen more efficiently, and in drug delivery, their unique properties mean they could serve as a non-toxic way to carry drugs to afflicted cells.