Investing in Gold
Book

Investing in Gold

The Essential Safe Haven Investment for Every Portfolio

Jonathan Spall
McGraw-Hill, 2009
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Editorial Rating

7

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  • Applicable

Recommendation

Gold draws a great deal of comment fueled by fiery passion, and often instigates discourses based on rumor, conspiracy theories and gossip. Allow Jonathan Spall, an expert on precious metals, to disprove the lingering myths about gold with his interesting, helpful little book. While Spall’s treatise doesn’t quite carry you on a complete tour of gold's role throughout human history, it does usher you down into the mines and through the gold refiner’s fire. His ability to explain the basics of the gold trade so clearly may be based on his writing skill, but it also reflects his years of experience explaining these ideas to nonspecialists. The only math he uses involves the simple equations used to calculate gold prices. While you may already be familiar with some of Spall’s information, getAbstract recommends his broad introduction to gold to those who are interested in all facets of the prized metal, from its extraction to its sale.

Summary

Mining and Refining Gold

South Africa has produced about one-third of all the gold ever mined. However, in recent years, its annual gold production has plummeted from 1,000 metric tonnes, “the term used globally in the gold market” [equivalent to 2205 imperial pounds] to 270 tonnes. In 2007, China surpassed South Africa as the largest producer of gold, extracting slightly more than 280 tonnes. Other top gold producers are Australia, the U.S., Peru and Russia. In the U.S. and Australia, miners extract gold from open pits; in South Africa, they excavate gold in underground shafts. Both methods present ecological issues because mining is a dirty process. Refiners must process huge amounts of ore to obtain minute amounts of gold. Cooling the shafts to temperatures that permit workers to operate in the hot, deep mines requires vast amounts of energy. Due to pressure from environmentalists, extraction companies are finding cleaner, more energy efficient ways to mine gold, but the “artisanal mining” that ardent conservationists advocate is not a practical way to meet the global demand for gold.

The first step in gold refining is the creation of doré bars, which vary...

About the Author

Johnathan Spall has more than 25 years of experience with gold and associated commodities. He is currently the director of commodities at Barclays Capital, a division of Barclays Bank.

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