GOLD IN ECONOMICS — Gold is a chemical element with the symbol Au (from the Latin word "Aurum") and atomic number 79. It is a precious metal which, for many centuries, has been used as money, a store of value and in jewelery. It is one of the coinage metals. Since the end of the Gold Standard, gold has largely lost its role as a form of currency. The Central banks still use gold as a international trading and swapping currency. But it is still considered as a store of value, an asset or reserve currency.

Gold and other precious metals are assets that are both tangible and liquid. For centuries gold has been used as a store of value. When viewed from the historical perspective, no other investment has the wealth preserving power of gold. Other assets are dependent upon a certain government or political climate to retain value, appreciate, and not be excessively taxed, but gold is largely independent of political climate.

In the beginning of 2007, gold advance in price has made 14%. According to the World Gold Council, gold demand rose 29% in the first half of 2005. It is a is a widespread way of investment.

The usual benchmark for the price of gold is known as the London Gold Fixing, a twice-daily meeting of representatives from five bullion-trading firms.

Gold investment is good for a long term perspectives.

GOLD MONEY STANDARD - value of monetary unit in gold equivalent. Gold standard as a monetary system, formed to the end of 19 century in many countries, due to which only gold was global equivalent and direct base of currency circulation. Gold-coin standard was a classical form of gold standard, characterized by unrestricted coinage and gold coin handling and easy change on paper money.

A Gold Rubble in Russia became a monetary unit after monetary reform 1895-97s. Gold coins were of 5, 10, and 15rub. value (imperials) and 7 rub.50 kop. (half imperials) and were in use till 1914. In 1921-22 the gold rubble was used as a calculating unit.

As a result of worldwide economic crisis in 1929-1933, almost all countries have moved to a paper money circulation.

Nevertheless, gold reserve - a centralized gold fund in bullions and coins — is still widely used by government financial bodies and international monetary organizations as an insurance fund for getting foreign currency if needed, by selling metal on gold market and also by giving it as a pledge during drawings from foreign countries or international organizations for import payment of necessary goods and reimbursement of over external obligations.

Gold as an Investment Tool.

In 1944 a Breton-Wood agreement was accepted and a золотодевизный was created, based on gold and two currencies- US dollars and British pounds, that (agreement) ended gold standard monopoly. According to new rules dollar became the only currency directly pegged to gold. US Exchequer Chamber obliged to change dollars on gold to foreign government establishments and central banks in the ratio $35 for troy ounce. Actually gold changed from main currency to a reserve one.

To the end of 1960s high inflation in USA made it impossible to save gold on the same level. The situation complicated by USA trade deficit. Market price on gold became much higher than the official one. In 1976 a floating rate system was made. After that gold became a specific investment good. There are two ways of gold investment — gold bullions and gold coins.

Buying gold bullions is a worldwide way of investment. In case of appearing negative factors of global size, such as worldwide economic crises, catastrophes, terrorist acts- gold gives an opportunity to save and multiply savings. In the beginning of 2007, gold advance in price was 14%.

The main advantage of investment in precious metals is - a good protection from inflation. Gold investment is good for a long term perspectives.