As gold made its way into the basic economic fabric of the global economy, it found three major functions that contributed to its value:

• Bullion – Coins and Bars: Gold is traditionally minted into either coins or bars for the purpose of currency, financial use, personal ownership, financial investments and market commodities.
• Jewelry Creation: Necklaces, earrings, bracelets and a variety of other forms of jewelry and adornments are made out of gold and manufactured as “gold jewelry.” They’re typically a more expensive and sought after product, depending on the purity of the gold that’s used to make them.
• Industrial and Electronic Usage: Construction, dental, medical and electronic industries have all found various uses and need for gold, though usually in a small amount. Cell phones, GPS systems, laptop computers, dental fillings, surgical instruments are just a few of the items that make use of at least a small amount of gold.

All the gold that is mined in a given year is used in one of these three capacities; though there are certain discrepancies within each category. For example, industrial and electronic usage can include gold that’s used for dental work as well as well as construction material.

Of the three forms that gold takes, the total usage that each one accounts for gets broken up by the following percentages:

• Bullion Coins and Bars: At the end of 2004 central banks and investment funds accounted for approximately 19 percent of all above ground gold as bank reserve assets.
• Jewelry: Jewelry is still the primary use of gold making up about 78 percent of its use on a yearly basis.
• Industrial: The remaining three percent amount is used for medical and industrial use in building materials, dental work and electronics.

At the turn of the century in 1900, there were approximately 400 tons of gold being mined per year. By 2010 that number had increased at a steady pace to 2,500 tons per year in order to meet the rising demand, particularly for gold jewelry and bullion gold for investments.

In total, 174,100 tonnes of gold has been mined since the beginning of civilization; though estimates tend to vary, ranging from 155,000 tonnes to over 2.5 million tonnes, an incredibly significant difference. Of the total amount mined, 90 percent has been extracted after the California Gold Rush.

India is the world’s largest single consumer of gold, accounting for nearly a quarter of all gold purchased every year. The weight of that consumption comes to about 860 tonnes, which is primarily used to make jewelry. In total, Indian households keep 18,000 tonnes of gold, accounting for more than 10 percent of the total global stock.

China is the second largest consumer of gold accounting for roughly 817 tonnes per year, while the rest of the world’s usage drops off considerably. By comparison, the United States uses 160 tonnes per year as the third largest consumer.

Like diamonds, the purity of gold is measured in carats, indicated by a K or kt symbol. Gold is considered “pure” at 24 carats or 99 percent (or more) gold content, at which point it is too soft to be useful for making jewelry. In some instances gold can be alloyed with other metals; most typically silver and copper.