Finding New Utility For Gold as a Generation Moves Away From Its “Store of Value”

The history of gold as a store of value goes back many centuries, laying the groundwork for its pivotal role in global economics. By the late 19th Century, several major global economies followed the Gold Standard, wherein many of the major currencies worldwide were fixed to gold at a set price per ounce.

The World Gold Council carried out extensive studies on the use of gold over the years. In their findings, it has designated the period between 1660 and 1819 as the rise of the gold standard, marking a significant evolution in its usage. Subsequently, the period between 1820 and 1930 was considered the heyday of the gold standard, reflecting its peak influence. Following this era, the period spanning from 1931 to 1999 is what the World Gold Council terms “After the Gold Standard,” indicating a shift in the global economic landscape.

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How the Days of the ‘Gold Standard' Faded Away

In 1944, during the end of WWII, the United States hosted the Bretton Woods conference. This conference dealt with the need for a new international system replacing the Gold System and positioning the dollar at the center since the United States dominated the global economic and political scene. As a result of these sweeping changes and the evolving global economy, the following decades saw significant shifts in the gold market.

During the 1960s, global inflation led to a severe dip in the price of gold in real terms, setting the stage for significant changes in the gold market. Consequently, in March 1968, a two-tier gold market came into being. The first tier was a freely floating private market, while the second one attempted to ensure official transactions at a fixed parity.

However, this system could not endure itself for long. In August 1971, US President Nixon announced the end of the on-demand convertibility of the dollar into gold for the central banks of other nations. With this, gold started trading freely on the global markets. 

Digital Coins are the New Gold for Millennials

On December 31st, 2021, Wharton School of Finance professor Jeremy Siegel was quoted saying:

“Bitcoin as an inflation hedge in the minds of many of the younger investors has replaced gold.”

He then went on to say:

“Digital coins are the new gold for millennials.” 

It would be pertinent to mention here that one of the reasons why gold lost significantly on its ‘Store of Value' aspect was because it failed to rise as an asset class, providing a hedge against inflation during the difficult times of the COVID-19 pandemic. This trend was further evidenced in 2021, when Gold recorded its worst performance in six years, with prices dropping below a key support level. Spot gold went below US$1,800 per ounce, while spot silver dipped to US$22.62 an ounce.

Amidst such drops in gold and other commodity assets, Bitcoin surged around 70% by the end of 2021, indicating a significant shift in investment trends. According to Nate Geracci, the president of the ETF Store:

“Millennial investors overwhelmingly desire to hold Bitcoin instead of traditional hedge assets like Gold.” 

This perspective, however, faced scrutiny, as Geracci's claim about the overwhelming desire was later found to be an overstatement when tallied with empirical data. Yet, the findings did not deny the preference for Bitcoin as a “Store of Value.”

Reinforcing this trend, a Harris Poll survey provided further insights into the growing interest in Bitcoin, particularly among younger demographics. It highlighted that the propensity to purchase Bitcoin (defined as the % of the surveyed population that is “very” or “somewhat” likely to purchase Bitcoin in the next five years) increased from 19% in fall 2017 to 27% in spring 2019. More interestingly, the 18-34 years old age group was the most inclined to purchase Bitcoin. The propensity in this age group increased from 32% to 42% during the same two-year span. 

While these studies and findings are indicative enough to suggest a moving away from using gold as a well-guarded store of value, has it translated to a reduced demand for gold?

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The Demand for Gold

Despite the generational shift observed in gold's usage as a store of value, the demand for the precious metal has not dipped, indicating its enduring appeal across different sectors. In fact, the World Gold Council estimates the average annual supply of gold for the period 2013-2022 to be more than 4,653 tonnes. 

In 2022, the majority of demand was for making jewelry, underscoring its traditional appeal. But interestingly enough, gold found significant use in technology, highlighting its versatility. During the first two quarters of 2023, for instance, more than 70 metric tonnes of gold were used in technology.

This utilitarian need for gold is something that many market stakeholders are excited about. It reflects a new dimension of gold's value in the modern economy beyond its conventional roles.

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Game-Changing Wearable Devices and the Use of Gold

Gold has many advantages. It is stable in air, possesses exceptional electrical conductivity, and has biocompatible features. These properties make it an ideal material for advanced scientific applications, as demonstrated in recent groundbreaking research.

This specific research that we talk about here is led by two professors from the Department of Materials Science and Engineering at POSTECH, the Pohang University of Science and Technology. The research led to an integrated wearable sensor device to simultaneously measure and process two bio-signals. 

To develop the solution, the team fused silver nanowires with gold. These gold nanowires helped constitute an integrated sensor capable of measuring both temperature and strain. 

The sensors proved immensely efficient in detecting subtle muscle tremors and identifying heartbeat patterns and speech through vocal cord tremors. It can also efficiently monitor body temperature changes. 

The presence of gold, through its inherent material properties, helped the sensors become highly stable without damaging the material interface. The flexibility and stretchability properties of the sensors also helped them to stick to the skin effortlessly. 

Gold Nanoparticles (GNP) have been finding significant use in many biomedical applications, such as: 

• In therapy with radioactive GNP
• Facilitating tissue engineering
• Regenerative medicine
• Aiding in drug and gene delivery applications
• Enhancing biosensing and biomedical imaging

Thus, this widespread utilization underscores the versatility and effectiveness of GNP in various medical fields.

Industry Players

Scientists have identified several properties of gold that make it suitable for advanced biomedical applications. Besides being biocompatible, researchers find gold nanoparticles amenable to desired functionalization, are non-corroding, and have useful optical and electronic properties.

As a result, several companies are investing in R&D to leverage gold's biomedical properties better. 

1. Fortis Life Sciences

Fortis has already developed a range of gold nanoparticle products, including gold nanospheres in solutions, nanorods, nanoshells, silica-shelled gold nanoparticles, custom GNPs, and more. Among these, the gold nanospheres are available in water with particle sizes anywhere between 5 and 100 nm and come with various nanosphere surfaces.

Gold nanorods are available in the form of surface plasmon resonant (SPR) rod-shaped nanoparticles. Their size distribution is narrow, while the shapes are uniform, and these gold nanorods are tunable throughout the visible and short wave near infrared (SWNIR). Moreover, the products do not come with ammonium surfactants, and the presence of citrate equips them with a stable and easily displaceable surface chemistry, functionally compatible with a wide range of molecules.

The gold nanoshells have silica cores surrounded by a gold shell, while the silica-shelled gold nanoparticles are just the opposite. 

The GNP products of Fotis Life Sciences have diverse applications in diagnostics and biomedical fields. The GNPs conjugate readily to antibodies and other proteins. They are also highly compatible with biomolecules, equipping them to be efficient for targeted therapeutics and photothermal cancer therapy applications.

Established in 2020, Fortis Life Sciences has grown quickly. Significant milestones marked this rapid expansion; in March 2022, it acquired Abcore, followed by the acquisition of the International Point of Care in July 2023. Additionally, in October 2022, it also expanded its international presence by opening an office in Seoul, South Korea. 

2. Tanaka Precious Metals

Tanaka Precious Metals, through its proprietary process, has produced GNPs that empower diagnostics and biosensors. In this process, it utilizes a gold-citric acid colloidal solution in which nanosized gold particles are dispersed. These spherical gold particles not only have high purity levels but also feature an adequately narrow size distribution. Furthermore, the particle surfaces are easily modifiable. 

The solution finds its use in in-vitro diagnostic and other test kits, demonstrating its broad applicability in medical testing and analysis. It can also be applied to test reagents, biomarkers, X-ray identification markers, etc., further showcasing its utility in a range of biomedical applications.

When it comes to its financials, Tanaka registered a net sales revenue of more than 680 million yen in 2022, where its gross profit was more than 78 million yen, while operating income was nearly 36 million yen. 

3. Cytodiagnostics

Founded in 2009 and headquartered in Burlington, Ontario, Canada, Cytodiagnostics is a privately held company that offers 40 nanometer stabilized gold nanoparticles. 

These nanoparticles are particularly valued for their versatility in scientific applications, as the product finds use in the adsorption of thiolated ligands such as oligonucleotides and polyethene glycols. Moreover, their increased stability also makes them ideal for physical and optical applications.

The company has its proprietary protocol for producing unconjugated gold nanoparticles, setting it apart in the industry. Notably, it also stands ahead of its peers by offering superior size distribution and shape. This advantage, particularly the narrow size distribution, makes the product highly suitable for protein adsorption. 

Cytodiagnostics also has a stringent quality control mechanism for its biomedical products derived from gold, emphasizing precision and reliability. This is achieved through the use of dynamic light scattering to guarantee size and monodispersity.

4. BBI Solutions

The UK-headquartered BBI Solutions is a privately held company and was founded in 1986, establishing itself as a key player in the field of nanotechnology. It is known for its colloidal gold nanoparticles and has a significant market presence, selling more than 500 million assays of gold colloids a year. 

While BBI Solutions' exact manufacturing method is proprietary, its GNPs are formed by the citrate reduction of a gold chloride solution without using any other stabilizing agents or preservatives. Further diversifying its product range, BBI offers a variety of GNPs, with sizes ranging from the smallest at 5 nm in diameter to the largest at 250 nm, all provided in purified water.

BBI has a unique manufacturing technique that makes it capable of producing large batches of gold with high reproducibility. It offers a firm foundation for conjugation, ensuring that the rapid diagnostic assay – in which it is used – offers reliable results.

In October 2021, BBI Solutions announced the launch of a full range of molecular tag gold conjugates, marking a significant expansion in their product lineup. BBI developed it using a 40nm gold colloid under the ISO13485 certification, ensuring high standards in production. 

The full range of offerings includes Goat anti-biotin, Monoclonal anti-biotin, Monoclonal anti-FITC, Monoclonal anti-HRP, Monoclonal anti-his tag, and Monoclonal anti-digoxin 40nm gold conjugates. These molecular tag conjugates are specifically designed for use in lateral flow devices and biosensors.

Gold's Future as a ‘Utility'

The use of gold in biology, medicine, health devices, and sensors will increase in the future. It has found use in both the fields of diagnostics and therapy, helping in visualization and bioimaging methods and strengthening analytic methods for diagnostics, including the homophase methods, dot-immunoassay, immune chromatography, and plasmon resonance biosensors. In therapy, it is used in photodynamic methods as well as therapeutic agents.

Further extending its utility, gold nanoparticles are also used increasingly for the targeted delivery of drugs. These particles, most promisingly, help deliver antitumor agents and antibiotics. This broadening application highlights gold's versatility in the medical field.

In addition to these therapeutic and diagnostic roles, gold nanoparticles also exhibit immunological properties. In 1986, a group of Japa ese researchers successfully attempted to produce antibodies to glutamic acid using colloidal gold particles as a carrier. 

This method subsequently found application in producing antibodies to several haptens and rigorous antigens, including amino acids, the platelet-activating factor, quinolinic acid, biotin, recombinant peptides, lysophosphatidic acid, endostatin, peptides of viral capsid of B and C hepatitis, influenza, murrain, α-amidated peptides, actin, antibiotics, azobenzene, Аβ-peptide, clenbuterol, surface Yersinia antigens, transmissible gastroenteritis virus, and tuberculin.

The innovations continued, as in 1996, researchers made further progress by exploring the possibility of using colloidal gold particles in the antiviral vaccines made for protection against the tick-borne encephalitis virus. The experiment showed greater protective properties than what its commercial analogs had to offer at that point in time. 

Complementing these developments, a number of studies have been carried out to test the feasibility of using GNP in designing DNA vaccines with gene constructions encoding proteins, indicating ongoing research and exploration into the diverse applications of gold in medicine and health.

This growing interest in GNPs, particularly in biotechnology, wearable health technology, and diagnosis technology, has prompted researchers to call for more studies into the biodistribution and toxicity of GNPs. Such in-depth understanding is crucial for advancing these applications, allowing for more progress to be achieved in a shorter span and at a larger scale.

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