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The History of Gold

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The History of Gold
G
old has occupied a unique social status for millennia. It has a long history as a valuable metal and its history is far from over. From the ancient Egyptians to the modern U.S. Treasury, there are few metals that have had such an influential role in human history as gold. Why is gold so important? What inherent value is held by gold? Will gold
continue to be valuable in the future? Today, I’m going to answer those
questions and share with you the history of gold.
Ancient civilizations and their love of gold 
Human fascination with gold is as old as recorded history. We don’t know for sure when the first human picked up a gold nugget and thought, “Hey, this is  pretty cool.” However, flakes of gold have been found in Paleolithic caves
dating back as far as 40,000 B.C. Most archaeological evidence shows that humans who came into contact with gold were impressed by the metal. Since gold is found all over the world, it has  been mentioned numerous times throughout ancient historical texts.
Egyptians and gold 
The first firm evidence we have of human interaction with gold occurred in ancient Egypt around 3,000 B.C. Gold played an important role in ancient Egyptian mythology and was prized by pharaohs and temple priests. It was so important, in fact, that the capstones on the Pyramids of Giza were made from solid gold. The Egyptians also produced the first known currency exchange ratio which mandated the correct ratio of gold to silver: one piece of gold is equal to two and a half parts of silver. This is also the first recorded measurement of the lower value of silver in comparison to gold.

 
The Egyptians also produced gold maps
 – 
 some of which survive to this day. These gold maps described where to find gold mines and various gold deposits around the Egyptian kingdom. As much as the Egyptians loved gold, they never used it as a bartering tool. Instead, most Egyptians used agricultural products like barley as a de-facto form of money. The first known civilization to use gold as a form of currency was the Kingdom of Lydia, an ancient civilization centered in western Turkey.
Ancient Greeks and gold 
Later on in history, the ancient Greeks viewed gold as a social status symbol and as a form of glory amongst the immortal gods and demigods. Mortal humans could use gold as a sign of wealth and gold was also a form of currency. Contrary to what you might think, the Olympics tradition of giving out gold medals to victors did not begin until the modern Olympics and has little to do with Greek tradition.
The Bible and gold 
Gold is also mentioned in the Bible, where Genesis 2:10-12 describes the lands of Havilah, near Eden, as a place where good gold can be found. Incans, Aztecs, and numerous other civilizations also used gold prolifically throughout the early history, including it in religious ceremonies and in famous architectural designs.
There’s one common trend here across all ancient civilizations: gold is a status
symbol used to separate one class from another. From emperors to priests to the elites and upper middle class, those who held gold also tended to hold power.
1792
 –
 The United States adopts a gold and silver standard 
In 1792, the United States Congress made a decision that would change the modern history of gold. Congress passed the Mint and Coinage Act. This Act established a fixed price of gold in terms of U.S. dollars. Gold and silver coins  became legal tender in the United States, as did the Spanish Real (a silver coin of the Spanish Empire). At the time, gold was worth approximately 15 times more than silver. Silver was used for small denomination purchases while gold was used for large denominations. The U.S. mint was legally required to buy and sell gold and

 
silver at a rate of 15 parts silver to 1 part gold. As a result, the market rate for gold rarely varied beyond 15.5 to 1 or 16 to 1. That ratio would change after the Civil War. During the Civil War, the U.S. was unable to pay off all its debts using gold or silver. In 1862, paper money was declared to be legal tender, marking the first time a fiat currency (not convertible on demand at a fixed rate) was used as an official currency in the United States.
Just a few years later, silver was officially removed from the U.S. Mint’s fixed
rate system in a bill called the Coinage act of 1873 (and criticized by American
citizens as the Crime of ’73). This removed the silver dollar from circulation,
although coins worth less than $1 still contained silver. The United States would never use silver dollars again. Throughout the late 1800s, the issue remained an important political topic. In 1900, the gold dollar was declared to be the standard unit of account in the United States and paper
dollars were issued to represent the country’s gold reserves.
 
1870s gold rushes 
A number of gold rushes occurred throughout the 1800s. Since a single gold nugget could make someone a millionaire, prospectors rushed to far-flung corners of the planet in search of riches  Notable gold rushes included:
 
North Carolina (1799):
 The first major gold rush in America occurred in 1799 in North Carolina, when a young boy discovered a massive 17 pound gold nugget in Cabarrus County.
 
California (1848):
 The San Francisco 49ers football team is famously named after the gold rush of 1848/49 in California. Prospectors came from across the world to San Francisco. Before 1848, only about 1,000 people lived in San Francisco. Within two years of gold being discovered in the region, the  population had swelled to 25,000. There were so many recent migrants to San Francisco, in fact, that the massive San Francisco harbor was filled with empty ships. Nobody wanted to sail away from the bustling boomtown!
 
Klondike (1896):
 Gold was discovered in the Klondike River in the Yukon Territory and in other parts of British Columbia. Prospectors travelled far

 
north and fought harsh winters to claim their fortune in the land of the midnight sun.
 
Australia (1850s onward):
 Australia hosted a number of major gold rushes throughout the latter half of the 19
th
 century. Gold was discovered in New South Wales and Victoria in the 1850s and in Western Australia in the 1890s. Gold rushes helped to populate empty areas of the Australian Outback. Towns throughout Australia owe their existence to the gold rushes of the 1800s.
1944
 –
 Bretton Woods pegs the global price of gold 
The two World Wars wreaked havoc on the gold standard and world financial
markets. Of course, it didn’t help matters that the Great Depression occurred in
 between those two wars. After decades of war and conflict, world leaders came together under the Bretton Woods Agreements. This system created a gold exchange standard where the price of gold was fixed to the U.S. dollar. This was a radical experiment that had never been done before and it made the United States very
 powerful on the world’s ma
rkets. The U.S. dollar was chosen for the Bretton Woods system because the United
States was easily the world’s strongest economy coming out of the Second
World War. Unlike previously strong European nations, the United States did not have to repair infrastructure or fix towns that had been bombarded throughout the war. The day the price of gold was pegged to the U.S. dollar is one of the most important points of U.S. history because it helped make the United States the global superpower it is today.
1970s
 –
 Gold standard ends with the Vietnam War 
In 1944, gold was fixed at $35 per ounce for the foreseeable future. In the early 1970s, another war
 – 
 the Vietnam War
 – 
 caused the gold exchange standard to
collapse. America’s budget was in ruin and in 1971, Pres
ident Nixon suddenly decided to end the Bretton Woods system with a moment known in history as the Nixon Shock. Between 1971 and 1976, a number of attempts were made to salvage the gold standard. However, the price of gold continued to rise beyond what any currency could sustain.

 
If you want to get rich from gold, then you need to find experts you trust. Find an expert that has accurately predicted various gold value spikes over history. Find one who takes all of the information available and uses that information to make an informed decision. Or, try to research the information yourself and see if you can guess correctly. Ultimately, the price of gold has grown fairly steadily over the past few decades, and many experts predict that it will continue its gradual climb over the next few years. Will gold hit over $2000 per ounce? Will gold ever fall below $1000 again? The history of gold is far from over and there is still a lot to be written about the
human race’s most valuable commodity.