Financial writer Gerald M. Loeb said, "The desire for gold is the most universal and deeply rooted commercial instinct of the human race." Unfortunately for the environment and the world economy he is correct.
From the Egyptian Hieroglyphs that date the use of gold as early as 2600 BC to the American gold rushes of the nineteenth century, this monetary standard has been at the crux of many world economies and is still today.
The problem is that there is less and less of it to mine.
Common gold mining practice today requires the inclusion of "gold cyanidation." This controversial method consists of sprinkling the highly poisonous chemical compound cyanide on large amounts of low-grade ore.
The poisonous nature of cyanide, coupled with the destruction of vast landscapes and rainforests is starting to galvanize real concern among gold firms worried about there image. Earthworks, a mining industry watchdog, established a "No Dirty Gold Campaign" that protested outside many ritzy New York City stores.
This concern has led to a revision of company policy by one of the most prestigious jewelry vendors - Tiffany's & Co. The company's chairman, Michael J. Kowalski has decided it will only purchase its gold from a mine in Utah which does not practice gold cyanidation.
Significant accidents have occurred. In 2000, waste from a Romanian gold mine leaked into a tributary of the Danube River which resulted in the death of thousands of fish. A trail of cyanide from the spill traveled all the way to the Black Sea, over 1,600 miles away.
Intense pressure from lobbying groups led to the establishment of a cyanide regulatory code, which has just recently been confirmed. Companies now have regulations regarding the storage and transportation of the poison and are vulnerable to inspectors which will come from a newly established industry committee. Some experts were disappointed that implication of the code will be voluntary, not governmentally enforced.
Asian demand is makes up a large portion of world demand for the precious element. Traditional Indian weddings include gifts of gold. The family of the groom receives gifts from the bride's family for every family member, usually necklaces and bracelets for women and watches or rings for men. The bride is also expected to be adorned with gold jewelry for the occasion. India is the world's largest consumer of gold, with uses ranging from dowries to temple decorations.
As disposable income increases for middle-class Chinese, so does their demand for gold. Malls and markets in China's affluent regions now boast some of the grandest jewelry available in the world today.
Sales of gold this year reached to $38 billion - a record level according to the World Gold Council. Sales of gold have increased by 47 percent in India and 11 percent in China, both countries of enormous populations with cultural addictions to gold. The World Gold Council is an association of the world's top gold mining companies that was created in 1987 to stimulate world demand for gold.
Malaysia a few years ago had flirted with the idea of returning to a gold standard with the hopes of reducing global dependency on the United States dollar but such a currency has yet to emerge.
Gold for thousands of years has been a precious natural resource, and will continue to hold value in our modernizing world. Investment portfolios today are likely to include gold because of its relative stability and history of maintaining value. For the same reasons, gold is in high demand during unstable economic times and low confidence.
As China's economy hopes for a soft landing from its current boom, and with fears of America's housing bubble bursting we may see an increase in the reliance on gold in the future. It will be the environment that will pay the price.
Gregory Meiselbach is a freshman who has not yet declared a major.
