Gold is a unique commodity. It is prized for its scarcity and colour. It is malleable, durable and indestructible. It is valued for itself, and has no real substitutes. It differs from other commodities in three essential ways. First, gold exhibits many of the characteristics of a currency. It is a source of savings and wealth, it can be borrowed and lent and it is extensively traded in futures and option contracts. Second, gold is indestructible. Virtually all the gold ever mined remains in circulation as hoarding, jewellery or reserves held by governments. The amount held is equivalent to about 35 years’ consumption. Third, the demand for gold is relatively elastic. For most buyers, gold purchase is a non-essential, impulse or speculative activity. Demand depends on price and buyers’ perceived view of its future movement.