Jewelry still accounts for the biggest share of demand for the precious metal. In the second quarter of 2011, jewelry makers purchased nearly half of the total gold demand of 920 metric tons, according to the World Gold Council's latest Gold Demand Trends report. Demand from investors accounted for 39% of the total. Only 13%, or 118 metric tons, went for technological and industrial uses.
IN PHOTOS: Essential Uses of Gold in Business
The precious metal's unusual chemical and physical qualities make it a highly desirable material for use in six specific industries, according to the the World Gold Council: electronics, nanotechnology, automotive, space, engineering, and medicine. Some of the uses are fairly mature: dental fillings, for example. Other uses in engineering and nanotechnology are still in their early days.
Of the 118 metric tons used last year industrially, 84 metric tons went to electronics and 11 metric tons to dentistry. Of the remaining 23 metric tons, most of the gold was likely used in electroplating, as the other technology applications use minute amounts and many are not even available commercially.
Gold's current high prices are no doubt curbing a more widespread use of the metal as an industrial commodity. While miners and investors might not mind the steep rise in price, industrial users and consumers will either search for substitutes or delay buying.
These are the the six most essential uses of gold in industry.
The world today is full of electronic circuit boards, from computers to cellphones. Because gold is a highly efficient conductor, it's used to make the bonding wires that connect those circuit boards' components -- and there are thousands of connections on a single circuit board. But because those bonding wires are thinner than a human hair, the total amount of gold used is minuscule. A mobile device like a smartphone or tablet PC contains about 0.0002 ounces of gold. At $1,800 an ounce for gold, that's only 36¢ worth of gold in a typical device. Of course, with 1 billion phones manufactured each year, demand for gold from that industry alone adds up to 91 metric tons of gold -- $360 million worth. More will be accounted for by the 400 million desktops and laptops, and the more than 250 million TVs that will be manufactured in 2011 alone.
For centuries, gold has been used to make stained glass -- and not just golden-hued glass, either. When it's broken down into nano-sized particles -- we're talking billionths of a meter -- the precious metal stops being gold colored and reflects a deep crimson red or a light blue. Nanoparticle gold also has a wide variety of other uses -- especially as a chemical catalyst. Using gold as a catalyst in making paints and adhesives could lead to the elimination of toxic mercury from the process. In chemical processes, a gold catalyst can lower both the temperature and pressure needed to start a reaction, thereby reducing the amount of fuel needed -- and thus the cost of production.
Using gold leaf as a decorative element on buildings has a long history: The Egyptians were the first to figure out how to stretch a single ounce of gold into a thin sheet that could cover 200 square feet. Today, even thinner films of gold are used as a reflective coatings on windows to keep buildings cooler. It's now possible to stretch an ounce of gold to cover up to 1,000 square feet of window surface. Similarly, a gold-palladium alloy is used to braze metals subjected to very high operating temperatures, like jet engines. A thin plating of gold is also used on some parts of fuel cells to reduce corrosion and increase electrical conductivity.
Catalytic converters have used precious metals for years to remove harmful emissions from car and truck exhausts. Platinum and palladium are the most popular, but the recent addition of gold to catalytic converters used on diesel-powered vehicles opens up a new use for the metal. These gold-added converters are coming into widespread use in Europe, where engines have to meet the world's most stringent emission requirements. When the technology was introduced in 2008, gold was cheaper than platinum or palladium, making those catalytic converters at the time cheaper than those using other precious metals. For the moment, this is no longer the case.
5. Space Exploration
Gold's attributes of high reflectivity, electrical conductivity and corrosion resistance have made it a mainstay of space programs. In the U.S., the now-defunct space shuttle program used about 90 pounds of gold in each shuttle -- about $2.4 million worth at today's prices. Putting gold into space may be the equivalent of sending coal to Newcastle: Recent research indicates that the Earth's gold may have come from a massive meteor shower that hit the planet 4 billion years ago. And there's plenty more where that came from. The single asteroid Eros contains more gold than has ever been mined on Earth.
Because of its resistance to tarnishing and decay, gold has been used in medicine for thousands of years. Ayurveda practitioners in India today are estimated to consume a few metric tons of gold every year. In the seventh century BCE, the Etruscans used fine gold wire to fasten false teeth. Modern dentistry continues to demand gold -- 11 metric tons of it in the second quarter of 2011 alone. Nanoparticles of gold serve many other modern medical uses -- in pregnancy test kits, in treatments for rheumatoid arthritis and certain cancerous tumors, to detect quickly the presence of food-borne pathogens like salmonella and E. coli, and to provide rapid screening tests for HIV.