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Gold through the ages

14 Aug 2020
Gold through the ages

Gold has always been a natural wonder through the ages, a shiny yellow coloured precious metal, one of the worlds most prized and sought-after possessions. The limited resource is unmatched in terms of beauty and chemical composition. We almost intuitively place gold as one of the most valuable possessions, equating it with power. 

Gold has been used for thousands of years for its aesthetics and resilience. We have seen it used more commonly in the making of jewellery and decorative items. However, gold has also been used in many industries such as health, aviation and electricals. 

Gold is the world’s oldest form of currency. Known as a safe-haven asset in the investment market, it has stood the test of thousands of years, showing that it can hold its value in times of economic and political uncertainty unlike many other financial assets.

Ancient Times

Gold has a very long history dating back over 5000 years. It has historically been seen to have a store of value, been associated with the gods and with immortality; these are common themes found in cultures throughout the world. It has been found as far back as the pre-dynastic period in Egypt used for all sorts of remarkable artefacts. There is evidence as far back as 3100 B.C of a gold/silver value ratio in the code of Menes, the founder of the first Egyptian Dynasty. In this code it is stated that “one part of gold is equal to two and one-half parts of silver in value” proving that gold has been the more valuable of the two precious metals. Gold was owned by the powerful, it was made into objects of worship, used to decorate sacred locations or gift the privileged far before it was turned into a form of money.

Gold was money in ancient Greece, used to trade and barter, starting the extensive mining of gold throughout the Mediterranean and Middle East regions by 550 B.C. This concept of gold sent the Romans on a large-scale pursuit of the precious metal, seeing the science of goldmining advance significantly. They diverted streams of water to mine hydraulically, introduced waterwheels and ultimately found ways to separate gold-bearing rocks from normal rock.

The European exploration of the Americas was fuelled in no small part by reports of the gold ornaments displayed in great profusion by Native American peoples, especially in Mesoamerica, Peru, Ecuador and Colombia. The Aztecs regarded gold as the product of the gods, calling it literally “god’s excrement” and similarly the Incas referred to gold as the “tears of the sun”. For centuries there have been legends about the riches of the Inca empire, about lost treasures and even entire cities made of pure gold.

Gold’s beauty, scarcity, unique density and the ease by which it could be melted, formed, and measured made it a natural trading medium. Gold gave rise to the concept of money itself: portable, private and permanent. Gold (and silver) in standardized coins came to replace barter arrangements and made trade in the Classic period much easier.

Modern Times

In 1792 the United States Congress made a decision that would change the modern history of gold. Congress passed the Mint and Coinage Act that would establish a fixed price of gold in terms of US dollars. Gold and silver coin became legal tender. 

With gold being a viable source of wealth turning anyone who found it into a millionaire, in the 1800’s we saw a rush of prospectors searching high and low all over the world, digging up the natural rock that could be found in the ground and streams. This Gold Rush happened particularly through America, Canada and Australia.

During the Civil war the US was unable to pay off all its debts using gold or silver. In 1962, paper money was declared to be legal tender, marking the first time that fiat currency was used as an official currency in the United States. The two World Wars also caused havoc on the gold standard and world financial markets with a great depression occurring right between the two. Later in the 1970’s the Vietnam war had done the same, causing the gold exchange standard to collapse. There have been many attempts to salvage the gold standard, however, the price of gold continued to rise beyond what any currency could sustain.

“Gold is forever. It is beautiful, useful, and never wears out. Small wonder that gold has been prized over all else, in all ages, as a store of value that will survive the travails of life and the ravages of time.” — James Blakeley

Gold – Now

The world rapidly and continually changes but gold through the ages has always been a constant, it has been one of the most extraordinary and revered metals in the history of civilisation. Its rarity and aesthetics have formed an expectation and a standard of importance and wealth. Gold Mining companies all over the world have been sent in some cases more than three kilometres underground just to keep up demand for the precious metal.

Today gold is still being used in almost the same way as in its history, more commonly to create jewellery and increase wealth. Known as the safe haven in the investment market, it has proven time and time again that it can hold its value amidst economic and political uncertainty, unlike many other financial assets. This was evident when the geopolitical tensions between 2003 and 2008 continued to elevate the price of gold. In 2008, the global economic crisis increased the price of gold even further. After reaching a high of over $1,900 per ounce in 2011, gold prices waned before the more recent 2020 COVID19 Pandemic and further geopolitical tensions that have seen the gold price at its highest since 2008.

Gold definitely hasn’t lost its lustre; The jewellery industry accounts for more than 50% of the demand for the precious metal. While, modern science and technologies are continually revolutionising the way we use gold in modern medicine and electrical components. 

It is fascinating to think that all of the gold that has ever been mined throughout history still exists today in some way or form. You can find out what other new and innovative uses there are for gold in this article by the World Gold Council – New Uses for Gold.



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Resources:
gold.org
nma.org
onlygold.com

sothebys.com
bebusinessed.com