The Story of Gold
Posted by Nicholas Bufano on Thu, Nov 11, 2010 @ 08:28 AM
In the history of civilized world, gold has long been a highly desired and sought after metal. Whether societies have valued gold as a precious commodity or as a unit of currency, the quest for gold has been in existence since 2600 BC in Egypt, and the metal is still highly valued across the globe today as a means of industrial application and protection of wealth.
In this post, we take a look at how humans across many time periods and cultures have kept gold alive since the first gold deposits were discovered and mined.
Gold’s Past
Ancient Egypt has historically been known for its large production of gold, and ancient hieroglyphics describe gold as a brilliant and indestructible metal. Ancient Egyptians also associated gold with the sun, and claimed that the skin of their gods contained gold. Together with Nubia, Egypt became the largest producer of gold, which led to gold becoming the standard unit of exchange for international trade.
About 1200 BC, Egyptians became the first to pound gold into gold leaf, mix gold with other metals to improve durability and change color, and use wax to mold gold into shapes. Wax is still used in jewelry making today.
By 550 BC, gold became prevalent in Greece, where it was heavily mined and became the primary form of monetary exchange.
Next, in Rome, gold was mined extensively using new methods, including hydraulic mining which diverts streams of water, and roasting to separate gold from rocks.
While the use of gold was limited throughout the Middle Ages, the early 1700s introduced gold in Brazil, which became the largest producer of gold by 1720. Also in 1700, Sir Isaac Newton created the first gold standard in Great Britain, which led to a recall of all existing currency so that a new coin could be minted. This standard remained in place for nearly 200 years. The United States went on the gold standard in 1900.
Across the Atlantic in the Americas, the well-known gold rushes began in the early 19th century in North Carolina. A surge of gold rushes continued throughout the century as large deposits were discovered in California, Georgia and Colorado, and also internationally in New Zealand, Australia, South Africa and Canada. Individuals would migrate to the areas where gold was said to be found, and would mine in hopes of becoming instantly independently wealthy.
Gold’s Present
As of 2009, 165,000 tons of gold had been mined throughout history. Today, gold continues to be highly valued, with the price of gold closing each day at historically high prices. As of today, gold’s spot price is $1409.
Gold mining output has decreased overall as alternate economies have grown over the 20th century. Gold is only a fraction of overall trading markets, and most gold to currency fixed exchange rates were not maintained.
However, gold is still used for its monetary value as a means of investment and protection of wealth, either in the form of gold bars (bullion) or coins. In addition, gold is used for many industrial purposes, including jewelry, electronics, chemistry and even food and drink.
While other metals, such as the platinum group of metals, may hold a higher price, gold remains one of the most desirable metals for its beauty, usefulness and long tradition of adoration.
Gold’s Future
The future of gold remains strong and positive, with prices expected to continue to rise into 2011. However, because the existence of gold is finite, the need to refine and reuse gold is key to its perpetuation. Businesses and individuals can sell their unused gold to be refined, reused and resold back into industry to reduce the need to mine for additional gold.
What do you predict for the future of gold? Will prices continue to rise, and new industrial applications be developed? Let us know your thoughts.
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Sources:
Reuters: Goldman Sachs cuts 2010, 2011 gold price forecasts
World Gold Council: Goldipedia
Wikipedia: Gold
Wikipedia: Gold rush