A Brief History of Gold
A child finds a shiny rock in a creek, thousands of years ago, and the human race is introduced to gold for the first time.
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.
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 doubtornamental, 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.
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?
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.
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.
The Incas referred to gold as the "tears of the Sun."
Homer, in the "Iliad" and "Odyssey," makes mention of gold as the glory of the immortals and a sign of wealth among ordinary humans.In Genesis 2:10-12, we learn of the river Pison out of Eden, and "the land of Havilah, where there is gold: and the gold of that land is good?"
As far back as 3100 B.C., we have evidence 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." This is our earliest of a value relationship between gold and silver.
In ancient Egypt, around the time of Seti I (1320 B.C.), we find the creation of the first gold treasure map now known to us. Today, in the Turin Museum is a papyrus and fragments known as the "Carte des mines d'or." It pictures gold mines, miners' quarters, road leading to the mines and gold-bearing mountains, and so on.
Where is that gold mine located? Well, you know how it is with treasure maps - there's always something a little vague about them, to throw you off the trail.
Modern thought is that it portrays the Wadi Fawakhir region in which the El Sid gold mine is located, but the matter is far from settled. Jason and the Argonauts sought the Golden Fleece around 1200 B.C.
That Greek myth makes more sense when you realize that the fleece that it refers to is the sheep's fleece used in the recovery of fine placer gold.
Early miners would use water power to propel gold-bearing sand over the hide of a sheep, which would trap the tiny, but heavy, flakes of gold. When the fleece had absorbed all it could hold, this 'golden fleece' was hung up to dry, and when dry would be beaten gently so that the gold would fall off and be recovered.
This primitive form of hydraulic mining began thousands of years ago, and was still being used by some miners as recently as the California gold rush of 1849.
The first use of gold as money occurred around 700 B.C., when Lydian merchants produced the first coins. These were simply stamped lumps of a 63% gold and 27% silver mixture known as 'electrum.' This standardized unit of value no doubt helped Lydian traders in their wide-ranging successes, for by the time of Croesus of Mermnadae, the last King of Lydia (570 -546 B.C.), Lydia had amassed a huge hoard of gold. Today, we still speak of the ultra-wealthy as being 'rich as Croesus.'
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4000 B.C. A culture, centered in what is today Eastern Europe,
begins to use gold to fashion decorative objects. The
gold was probably mined in the Transylvanian Alps or
the Mount Pangaion area in Thrace.
3000 B.C. The Sumer civilization of southern Iraq uses gold to
create a wide range of jewelry, often using
sophisticated and varied styles still worn today.
2500 B.C. Gold jewelry is buried in the Tomb of Djer, king of the
First Egyptian Dynasty, at Abydos, Egypt.
1500 B.C. The immense gold-bearing regions of Nubia make
Egypt a wealthy nation, as gold becomes the
recognized standard medium of exchange for
international trade.
The Shekel, a coin originally weighing 11.3 grams of
gold, becomes a standard unit of measure in the
Middle East. It contained a naturally occurring alloy
called electrum that was approximately two-thirds
gold and one-third silver.
1350 B.C. The Babylonians begin to use fire assay to test the
purity of gold.
1200 B.C. The Egyptians master the art of beating gold into leaf
to extend its use, as well as alloying it with other
metals for hardness and color variations. They also
start casting gold using the lost-wax technique
that today is still at the heart of jewelry making.
Unshorn sheepskin is used to recover gold dust from
river sands on the eastern shores of the Black Sea.
After slucing the sands through the sheepskins, they
are dried and shaken out to dislodge the gold particles.
The practice is most likely the inspiration for the
“Golden Fleece”.
1091 B.C. Little squares of gold are legalized in China as a
form of money.
560 B.C. The first coins made purely from gold are minted in
Lydia, a kingdom of Asia Minor.
344 B.C. Alexander the Great crosses the Hellespont with
40,000 men, beginning one of the most extraordinary
campaigns in military history and seizing vast
quantities of gold from the Persian Empire.
300 B.C. Greeks and Jews of ancient Alexandria begin to
practice alchemy, the quest of turning base metals
into gold. The search reaches its pinnacle from the
late Dark Ages through the Renaissance.
218 B.C. –
202 B.C. During the second Punic War with Carthage, the
Romans gain access to the gold mining region of
Spain and recover gold through stream gravels and
hardrock mining.
58 B.C. After a victorious campaign in Gaul, Julius
Caesar brings back enough gold to give 200 coins to each of his soldiers and repay all of Rome’s debts.
50 B.C. Romans begin issuing a gold coin called the Aureus.
476 A.D. The Goths depose Emperor Romulas Augustus,
marking the fall of the Roman Empire.
600 A.D. –
699 A.D. The Byzantine Empire resumes gold mining in central Europe and France, an area untouched since the fall of the Roman Empire.
742 A.D. –
814 A.D. Charlemagne overruns the Avars and plunders their vast quantities of gold, making it possible for him to take control over much of western Europe.
1066 A.D. With the Norman conquest, a metallic currency
standard is finally re-established in Great Britain with
the introduction of a system of pounds, shillings, and pence. The pound is literally a pound of sterling silver.
1250 A.D. – 1299 A.D. Marco Polo writes of his travels to the Far East, where the “gold wealth was almost unlimited.”
1284 A.D. Venice introduces the gold Ducat, which soon becomes the most popular coin in the world and remains so for more than five centuries.
1284 A.D. Great Britain issues its first major gold coin, the
Florin. This is followed shortly by the Noble,
and later by the Angel, Crown, and Guinea.
1377 A.D. Great Britain shifts to a monetary system based on gold and silver.
1511 A.D. King Ferdinand of Spain says to explorers, “Get gold,
humanely if you can, but all hazards, get gold,” launching massive expeditions to the newly discovered lands of the Western Hemisphere.
1556 A.D. Georgius Agricola publishes De re Metallica, which describes the fire assay of gold during the Middle Ages.
1700 A.D. Gold is discovered in Brazil, which becomes the
largest producer of gold by 1720, with nearly twothirds
of the world’s output.
Isaac Newton, as Master of the Mint, fixes the price
of gold in Great Britain at 84 shillings, 11 & ½ pence per troy ounce. The Royal Commission, composed of Newton, John Locke, and Lord Somers,
recommends a recall of all old currency, issuance of
new specie with gold/silver ratio of 16-to-1. The gold price thus established in Great Britain lasted for over 200 years.
1744 A.D. The resurgence of gold mining in Russia begins with the discovery of a quartz outcrop in Ekaterinburg.
1787 A.D. First U.S. gold coin is struck by Ephraim Brasher, a goldsmith.
1792 A.D. The Coinage Act places the United States on a bimetallic silver-gold standard, and defines the U.S. dollar as equivalent to 24.75 grains of fine gold and
371.25 grains of fine silver.
1799 A.D. A 17-pound gold nugget is found in Cabarrus County, North Carolina, the first documented gold discovery in the United States.
1803 A.D. Gold is discovered at Little Meadow Creek, North Carolina, sparking the first U.S. gold rush.
1804 A.D. – 1828 A.D. North Carolina supplies all the domestic gold coined by the U.S. Mint in Philadelphia for currency.
1816 A.D. Great Britain officially ties the pound to a specific
quantity of gold at which British currency is
convertible.
1817 A.D. Britain introduces the Sovereign, a small gold coin valued at one pound sterling
1830 A.D. Heinrich G. Kuhn announces his discovery of the
formula for fired-on Glanz (bright) Gold. It makes
Meissen gold-decorated china world famous.
1837 A.D. The weight of gold in the U.S. dollar is lessened to
23.22 grains so that one fine troy ounce of gold is
valued at $20.67.
1848 A.D. John Marshall finds flakes of gold while building a
sawmill for John Sutter near Sacramento, California,
triggering the California Gold Rush and hastening
the settlement of the American West.
1850 A.D. Edward Hammong Hargraves, returning to Australia
from California, predicts he will find gold in his
home country in one week. He discovered gold in
New South Wales within one week of landing.
1859 A.D. Comstock lode of gold and silver is struck in Nevada.
1862 A.D. Latin Monetary Union is established setting fineness,
weight, size, and denomination of silver and gold
coins of France, Italy, Belgium and Switzerland (and
Greece in 1868) and obligating all to accept eachother’s current gold and silver coins as full legal
tender.
1868 A.D. George Harrison, while digging up stones to build a
house, discovers gold in South Africa – since then,
the source of nearly 40% of all gold ever mined.
1873 A.D. As a result of ongoing revisions to minting and
coinage laws, silver is eliminated as a standard of
value, and the United States goes on an unofficial
gold standard.
1887 A.D. A British patent is issued to John Steward
MacArthur for the cyanidation process for recovering
gold from ore. The process results in a doubling of
world gold output over the next twenty years.
1896 A.D. William Jennings Bryan delivers his famous “Cross of Gold” speech at the Democratic national convention,
urging a return to bimetallism. The speech gains him
the party’s presidential nomination, but he loses in the
general election to William McKinley.
1898 A.D. Two prospectors discover gold while fishing in
Klondike, Alaska, spawning the la st gold rush of the
century.
1900 A.D. The Gold Standard Act places the United States
officially on the gold standard, committing the United
States to maintain a fixed exchange rate in relation to
other countries on the gold standard.
1903 A.D. The Engelhard Corporation introduces an organic
medium to print gold on surfaces. First used for
decoration, the medium becomes the foundation for
microcircuit printing technology.
1913 A.D. Federal Reserve Act specifies that Federal Reserve
Notes be backed 40% in gold.
1914 A.D. –
1919 A.D. A strict gold standard is suspended by several
countries, including United States and Great Britain ,
during World War I.
1925 A.D. Great Britain returns to a gold bullion standard, with
currency redeemable for 400-ounce gold bullion bars
but no circulation of gold coins.
1927 A.D. An extensive medical study conducted in France
proves gold to be valuable in the treatment of
rheumatoid arthritis.
1931 A.D. Great Britain abandons the gold bullion standard.
1933 A.D. To alleviate the banking panic, President Franklin D.
Roosevelt prohibits private holdings of all gold coins,
bullion, and certificates.
1934 A.D. The Gold Reserve Act of 1934 gives the government
the permanent title to all monetary gold and halts the
minting of gold coins. It also allows gold certificates
to be held only by the Federal Reserve Banks, putting
the U.S. on a limited gold bullion standard, under
which redemption in gold is restricted to dollars held
by foreign central banks and licensed private users.
President Roosevelt reduces the dollar by increasing
the price of gold to $35 per ounce.1935 A.D. Western Electric Alloy #1 (69% gold, 25% silver,
and 6% platinum) finds universal use in all switching
contacts for AT&T telecommunications equipment.
1937 A.D. The bullion depository at Fort Knox, Kentucky, is
opened.
1942 A.D. President Franklin D. Roosevelt issues a presidential
edict closing all U.S. gold mines.
1944 A.D. The Bretton Woods agreement, ratified by the U.S.
Congress in 1945, establishes a gold exchange
standard and two new international organizations, the
International Monetary Fund (IMF) and the World
Bank. The new standard involves setting par values
for currencies in terms of gold and the obligation of
member countries to convert foreign official holdings
of their currencies into gold at these par values.
1945 A.D. Gold-backing of Federal Reserve Notes is reduced by
25.5%
1947 A.D. The first transistor is assembled at AT&T Bell
Laboratories. The device uses gold contacts pressed
into a germanium surface.
1954 A.D. London gold market, closed early in World War II,
reopens.
1960 A.D. AT&T Bell Laboratories is granted the first patent for
the invention of the laser. The device uses carefully positioned gold-coated mirrors to maximize infrared
reflection into the lasing crystal.
The European Rheumatism Council confirms
intravenously administered gold is an effective
treatment for rheumatoid arthritis.
1961 A.D. Americans are forbidden to own gold abroad as well as
at home.
The central banks of Belgium, France, Italy, the
Netherlands, Switzerland, West Germany, the United
Kingdom and the United States form the London Gold
Pool and agree to buy and sell at $35.0875 per ounce.
1965 A.D. Col. Edward White makes the first space walk during
the Gemini IV mission, using a gold-coated visor to
protect his eyes from direct sunlight. Gold-coated
visors remain a standard safety feature for astronaut
excursions.
1967 A.D. South Africa produces the first Krugerrand. This 1-
ounce bullion coin becomes a favorite of individual
investors around the world.
1968 A.D. London Gold Market closes for two weeks after a
sudden surge in the demand for gold.
The governors of the central banks in the gold pool
announce they will no longer buy and sell gold in the
private market. A two-tier pricing system emerges:
official transactions between monetary authorities
are to be conducted at an unchanged price of $35 per
fine troy ounce, and other transactions are to be
conducted at a fluctuating free-market price.U.S. Mint terminates policy of buying gold from and
selling gold to those licensed by the U.S. Treasury to
hold gold.
Gold-backing of Federal Reserve Notes is eliminated.
Intel introduces a microchip with 1,024 transistors
interconnected with invisibly small gold circuits.
1970 A.D. The charge-coupled device is invented at Bell
Telephone Laboratories. First used to record the
faint light from stars, the device, which uses gold to
collect the electrons generated by light, eventually is
used in hundreds of civilian and military devices,
including home video cameras.
1971 A.D. On August 15, U.S. terminates all gold sales or
purchases, thereby ending conversion of foreign
officially held dollars into gold; in December, under
the Smithsonian Agreement signed in Washington,
U.S. devalues the dollar by raisin g the official dollar
price of gold to $38 per fine troy ounce.
The colloidal gold marker system is introduced by
Amersham Corporation of Illinois. Tin y spheres of
gold are used in health research laboratories
worldwide to mark or tag specific proteins to reveal
their function in the human body for the treatment of
disease.
1973 A.D. On February 13, U.S. devalues the dollar again and
announces it will raise the official dollar price of gold
to $42.22 per fine troy ounce. Dollar-selling
continues, and finally all currencies are allowed to
“float” freely, without regard to the price of gold. By
June, the market price in London has risen to more
than $120 per ounce.
Japan lifts prohibition on imports of gold.
1974 A.D. Americans permitted to own gold, other than just
jewelry, as of December 31.
1975 A.D. The U.S. Treasury holds a series of auctions at which
is accepts bids for gold in the form of 400-ounce bars.
In January, 754,000 troy ounces are sold and another
499,500 more in June.
1975 A.D. Trading in gold for future delivery begins on New
York’s Commodity Exchange and on Chicago’s
International Monetary Market and Board of Trade.
The Krugerrand is launched on to the U.S. Market.
1976 A.D. The Gold Institute is established to promote the
common business interests of the gold industry by
providing statistical data and other relevant
information to its members, the media, and the
public, while also acting as an industry spokesperson.
1976 A.D. –
1980 A.D. IMF sells one-third of its gold holdings, 25 million
troy ounces to IMF members at SDR 35/ounce in
proportion to members’ shares of quotas on August
31, 1975, and 25 million troy ounces at a series of
public auctions for the benefit of developing member
countries.
1978 A.D.
1980 A.D. U.S. Treasury sells 15.8 million troy ounces of goldto strengthen the U.S. trade balance.
1978 A.D. Amended IMF articles are adopted, abolishing the
official IMF price of gold, gold convertibility and
maintenance of gold value obligations; gold is
eliminated as a significant instrument in IMF
transactions with members; and the IMF is
empowered to dispose of its large gold holdings. By
Act of Congress, the U.S. abolishes the official price
of gold. Member governments are free to buy and
sell gold in private markets.
1978 A.D. A weak U.S. dollar propels interest in gold, aided by
such events as the U.S. recognition of Communist
China, events in Iran and Sino-Vietnamese border
disturbances.
U.S. Congress passes the American Arts Gold
Medallion Act, representing the first official issue of a
gold piece for sale to individuals in almost half a
century.
Japan lifts ban on gold exports, touching off a “gold
rush” among investors who can sell as well as buy.
1979 A.D. The Canadian 1-ounce Maple Leaf is introduced.
1980 A.D. Gold reaches intra-day historic high of $870 on
January 21 in New York and by year-end closes at
$591.
1981 A.D. Treasury Secretary Donald Regan announces the
formation of a Gold Commission “to assess and make
recommendations with regard to the policy of the U.S.
government concerning the role of gold in domestic
and international monetary systems.”
The first space shuttle is launched, using gold-coated
impellers in its liquid hydrogen fuel pump.
1982 A.D. Congress passes Olympic Commemorative Coin Act,
which includes issuing the first legal tender U.S. gold
coin since 1933.
1982 A.D. U.S. Gold Commission report recommends no new
monetary role for gold, but supports a U.S. gold
bullion coin.
New gold deposits are discovered in North America
and Australia.
Canada introduces the fractional Maple Leaf coins in
sizes of 1/4 ounce and 1/10 ounce.
China introduces the Panda bullion coin.
1986 A.D. The first new gold jewelry alloy this century, 990-
Gold (1% titanium) is introduced to meet the need
for an improved durability of 99% pure gold
traditionally manufactured in Hong Kong. The very
malleable alloy is easily worked into intricate design,
but can be converted into a hard, durable alloy by
simply heating it in an oven.
The American Eagle Gold Bullion Coin is
introduced by the U.S. Mint. Treasury resumes
purchases of newly mined gold.Goldcorp Australia issues the Nugget gold bullion
coin.
Gold-coated compact discs are introduced. The goldcoated
discs provide perfection of reflective
surfaces, eliminate pinholes common to aluminum
surfaces, and exclude any possibility of oxidative
deterioration of the surfaces.
1987 A.D. British Royal Mint introduces the Britannia Gold
Bullion Coin.
World stock markets suffer sharp reversal on October
19; volatile investment markets increase gold trading
activity.
The World Gold Council is established to sustain and
develop demand for the end uses of gold.
1988 A.D. The international media report huge gold purchases by
a “mystery” buyer, later reveled to be the Japanese
government in preparation for the minting of a major
commemorative coin. This coin, honoring the sixtieth
anniversary of Emperor Hirohito’s reign, is issued in
November.
1989 A.D. Austria introduces the Philharmoniker bullion coin.
1990 A.D. United States becomes the world’s second largest gold
producing nation.
1992 A.D. World Gold Council introduces the Gold Mark as an
international identification mark for gold jewelry.
1993 A.D. Germany lifts its value added tax restrictions on
financial gold, causing a resurgence of private demand
of gold.
India and Turkey liberalize their gold markets.
1994 A.D. Russia formally establishes a domestic gold market.
1996 A.D. The Mars Global Surveyor is launched with an onboard
gold-coated parabolic telescope-mirror that will
generate a detailed map of the entire Martian surface
over a two-year period.
1997 A.D. Congress passes Taxpayers Relief Act, allowing US
Individual Retirement Account holders to buy gold
bullion coins and bars for their accounts as long as
they are of a fineness equal to, or exceeding, 99.5%
percent gold.
1999 A.D. The Euro, a pan-European currency, is introduced,
backed by a new European Central Bank holding 15%
of its reserves in gold.
2000 A.D. Astronomers at the Keck Observatory in Hawaii use
the giant gold-coated mirrors of the most detailed
images of Neptune and Uranus ever captured.
2002 A.D. The Gold Institute’s Board of Directors votes to
dissolve the association and consolidate its activities
within the National Mining Association, effective
January 1, 2003. The decision was made against the
backdrop of consolidation in the gold sector and
changes in the general business climate.
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