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A particularly valuable precious metal. Gold is an element with the atomic number 79. It is used for jewelry, electronics and for other purposes. Historically, gold was used in many cultures as the basis for currency, but this is no longer the case. Investments in gold are often used as a hedge against inflation because it tends to maintain its value over time.


a mineral that is used both as an industrial base metal and for ornamental purposes, and is held by governments as part of their stock of INTERNATIONAL RESERVE assets in order to finance balance of payments deficits. Formerly, in the UK and many other countries, gold coins formed the basis of the domestic MONEY SUPPLY, but gold has now been replaced by banknotes and brass and nickel coins as the cash component of the money supply. See BULLION MARKET, WORLD GOLD COUNCIL.


a monetary ASSET that is held by countries as part of their INTERNATIONAL RESERVES and used to finance BALANCE OF PAYMENTS deficits.

Formerly, many countries operated a GOLD STANDARD system under which gold was used as the basis of a country's domestic MONEY SUPPLY as well as being used to finance payments deficits. Gradually, however, the ‘pure’ gold standard gave way to domestic monetary systems based on paper money and other metallic coins and, internationally, the gold-exchange standard in which foreign currencies such as sterling and the American dollar were used alongside gold as reserve assets.

In 1935 the price of gold was ‘fixed’ at $35 per fine ounce by the USA, Britain and France as part of a monetary pact between the three countries. This price was then ‘officially’ adopted by member countries of the INTERNATIONAL MONETARY FUND on its formation in 1947; gold was used as the NUMERAIRE of the Fund's fixed exchange-rate system in setting par values for members’ currencies, and members were required to pay one quarter of their ‘quota subscriptions to the Fund in gold. Gold continued to serve as the linchpin of the IMF system, and its ‘official’ price remained pegged at $35 per ounce, down to 1971, when the Fund's fixed exchange-rate system gave way to floating exchange rates. Countries had, however, found it increasingly difficult to hold the price of gold at the $35 per ounce level as world demand for gold as an industrial metal and for ornamental purposes continued to expand. In 1961 a ‘gold pool’ was set up to regulate dealings in the metal, but in 1968 Fund members bowed to the inevitable and a ‘two-tier’ price structure was established; gold continued to be priced at $35 per ounce for ‘official’ transactions between countries’ central banks and the Fund, while the ‘free’ market price of gold was left to be determined by market forces.

In 1972, gold was dropped as the numeraire of the Fund and replaced by the SPECIAL DRAWING RIGHT unit, the Fund's existing gold holdings were sold off, and members were required to subscribe their quotas in a non-gold form. Outside the Fund, many countries have sold off part of their gold reserves, with the UK being particularly active in 1999, having taken the decision to reduce its gold holdings to around 8% of its total reserves. Overall, gold accounts for only some 0.3% of total international reserves. The market price of gold has fallen substantially over the past decade. In 1989 the price of gold averaged around $850 per ounce. Following UK gold sales in 1999, the price of gold at one point fell as low as $250 per ounce. However, despite the determination of the USA and a number of other major gold holders to put a moratorium on gold sales, the price of gold has remained depressed - currently (April 2005), it is around $430 per ounce.

The attractiveness of gold as a reserve asset is underpinned by the fact that, unlike national paper currencies (which are intrinsically worthless), it has a value in exchange as a commodity related to its use as an industrial base metal and for ornamental purposes. Gold holdings, however, suffer from the disadvantage that, compared with other assets such as STOCKS and SHARES, they yield no interest return.

References in periodicals archive ?
There's no better place to watch exciting live harness racing and the culmination of the Crock of Gold competition than at Tir Prince under the floodlights with the fairground and sea in the background.
Leading UK pacer Connors Dragon will be a short price to land heat three on Saturday, as long as he can put a rare lacklustre performance in the Crock Of Gold Final behind him, He was sent on early by driver Steve Lees but ran too freely, with fractions of 27.
I even met a bloke who reminded me of Gary: a character called Brett Morgan who doesn't back outsiders but apparently is to trotting what Harry Findlay is to jump racing, a man who'd had pounds 6,200 on the winner of last year's Crock of Gold, then, when it got disqualified for no better reason than that the driver broke the rules by taking his hands off the reins to punch the air, got done for speeding on his way home at 135mph.
Total series prize money is pounds 18,000 and the final winner will receive a massive pounds 5,000 as well as a replica Crock of Gold trophy.
His wins have included a high grade final at Appleby, a heat of the Crock of Gold at Tir Prince and the Free for All at the recent Aberystwyth meeting.
The Big Society is never going to turn into a crock of gold for those who participate but the concept will come with its very own Bank - providing finance for projects which ordinary members of the public club together to provide.
So I joined many other fans unable to get inside at the nearby Crock of Gold pub, where Albion supporters sang all the songs, cheered every flowing move and jumped with excitement at every near miss.
Is this the same man who promised a crock of gold at the end of the rainbow?
I'm delighted for Paddy, who was been with me a long time and was involved in the Rainbows End and Crock Of Gold Syndicates,'' said Crowley.
To him, ballooning house prices must look like a crock of gold waiting for his tax collectors to prise open.
Tune in to watch the Welsh Cup at Amman Valley, The Crock of Gold at Tir Prince and coverage of the Ceredigion and Tregaron festivals.
It's your chance to walk into one of 2300 William Hill betting shops, slap a pounds 2 coin on the counter and have a winter's worth of fun with a possible pounds 100,000 crock of gold at the end of the rainbow.