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Brief History of Gold
Gold
was first discovered as shining, yellow nuggets. "Gold
is where you find it," so the saying goes, and gold was
first discovered in its natural state, in streams all
over the world. No doubt it was the first metal known to
early hominids.
Gold became a part of every human culture. Its
brilliance, natural beauty, and luster, and its great
malleability and resistance to tarnish made it enjoyable
to work and play with.
Because gold is dispersed widely throughout the geologic
world, its discovery occurred to many different groups
in many different locales. And nearly everyone who found
it was impressed with it, and so was the developing
culture in which they lived.
Gold was the first metal widely known to our species.
When thinking about the historical progress of
technology, we consider the development of iron and
copper-working as the greatest contributions to our
species' economic and cultural progress - but gold came
first.
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Gold is
the easiest of the metals to work. It occurs in a
virtually pure and workable state, whereas most other
metals tend to be found in ore-bodies that pose some
difficulty in smelting. Gold's early uses were no doubt
ornamental, and its brilliance and permanence (it
neither corrodes nor tarnishes) linked it to deities and
royalty in early civilizations.
Gold has always been powerful stuff. The earliest
history of human interaction with gold is long lost to
us, but its association with the gods, with immortality,
and with wealth itself are common to many cultures
throughout the world.
Early civilizations equated gold with gods and rulers,
and gold was sought in their name and dedicated to their
glorification. Humans almost intuitively place a high
value on gold, equating it with power, beauty, and the
cultural elite. And since gold is widely distributed all
over the globe, we find this same thinking about gold
throughout ancient and modern civilizations everywhere.
Gold, beauty, and power have always gone together. Gold
in ancient times was made into shrines and idols ("the
Golden Calf"), plates, cups, vases and vessels of all
kinds, and of course, jewelry for personal adornment.
The "Gold of Troy" treasure hoard, excavated in Turkey
and dating to the era 2450 -2600 B.C., show the range of
gold-work from delicate jewelry to a gold gravy boat
weighing a full troy pound. This was a time when gold
was highly valued, but had not yet become money itself.
Rather, it was owned by the powerful and well-connected,
or made into objects of worship, or used to decorate
sacred locations.
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Gold has
always had value to humans, even before it was money.
This is demonstrated by the extraordinary efforts made
to obtain it. Prospecting for gold was a worldwide
effort going back thousands of years, even before the
first money in the form of gold coins appeared about 700
B.C.
In the quest for gold by the Phoenicians, Egyptians,
Indians, Hittites, Chinese, and others, prisoners of war
were sent to work the mines, as were slaves and
criminals. And this happened during a time when gold had
no value as 'money,' but was just considered a desirable
commodity in and of itself.
The 'value' of gold was accepted all over the world.
Today, as in ancient times, the intrinsic appeal of gold
itself has that universal appeal to humans. But how did
gold come to be a commodity, a measurable unit of value?
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Gold,
measured out, became money. Gold's beauty, scarcity,
unique density (no other metal outside the platinum
group is as heavy), 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.
Gold was money in ancient Greece. The Greeks mined for
gold throughout the Mediterranean and Middle East
regions by 550 B.C., and both Plato and Aristotle wrote
about gold and had theories about its origins. Gold was
associated with water (logical, since most of it was
found in streams), and it was supposed that gold was a
particularly dense combination of water and sunlight.
Their science may have been primitive, but the Greeks
learned much about the practicalities of gold mining. By
the time of the death of Alexander of Macedon (323
B.C.), the Greeks had mined gold from the Pillars of
Hercules (Gibraltar) all the way eastward to Asia Minor
and Egypt, and we find traces of their placer mines
today. Some of the mines were owned by the state, some
were worked privately with a royalty paid to the state.
Also, nomads such as the Scythians and Cimmerians worked
placer mines all over the region. The surviving Greek
gold coinage and Scythian jewelry both show superb
artistry.
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The Roman
Empire furthered the quest for gold. The Romans mined
gold extensively throughout their empire, and advanced
the science of gold-mining considerably. They diverted
streams of water to mine hydraulically, and built
sluices and the first 'long toms.' They mined
underground, also, and introduced water-wheels and the
'roasting' of gold-bearing ores to separate the gold
from rock. They were able to more efficiently exploit
old mine-sites, and of course their chief laborers were
prisoners of war, slaves, and convicts.
A monetary standard made the world economy possible. The
concept of money, (i.e., gold and silver in standard
weight and fineness coins) allowed the World's economies
to expand and prosper. During the Classic period of
Greek and Roman rule in the western world, gold and
silver both flowed to India for spices, and to China for
silk. At the height of the Empire (A.D. 98-160), Roman
gold and silver coins reigned from Britain to North
Africa and Egypt.
Money had been invented. Its name was gold. |
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In the
middle ages, alchemists spent their efforts and time
trying to turn almost any other metal to gold. Gold was
so sought after that the European explorers sailing
across the world’s oceans fought with locals in foreign
lands in order to secure more gold for their kings and
queens. Sir Isaac Newton, Master of the British Mint,
fixed the price of gold at 84 shillings 11.5 pence per
troy ounce throughout the British empire.
The 19th century
saw the focus on gold shift to the USA with the gold
rush. The California Gold Rush (1848–1855) began on
January 24, 1848, when gold was discovered by James
Marshall at Sutter’s Mill in California. This later
spread to Australia.
In 1900, the Gold Standard Act placed the United States
officially on the gold standard, committing the country
to maintain a fixed exchange rate in relation to other
countries on the gold standard. This lasted until 1919,
when World War I forced both the USA and Britain to
suspend it.
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Early 20th
century saw many new discoveries for the use of gold.
These uses extend from medicine to telecommunications to
space technology. As we enter the 21st century, this
precious metal is still one of the most prized item in
man’s obsession to acquire wealth, power and fame.
Olympians strive for gold, countries held gold in their
reserves and during times of upheaval, people turn to
gold as a refuge from the turmoil and uncertainty of the
global financial markets.
Today, Gold is still a precious metal – an asset of
class within a class of assets. It is for such simple
yet universal reasons that any serious investor or
trader should learn, understand and respect this
precious metal.
Many reasons have been given for investing in it – as
a hedge against inflation, as a diversification of
assets for investment, as a store of value, etc.
Whatever the reasons, there is one simple fact to keep
in mind when looking at Gold as a tool for wealth
creation – there is no asset that has the same history
and characteristic and empirically, it trades in a class
of its own! |
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