A brief history: gold

768px-Golden-Temple-Jan-07Gold has become a common sight for many of us, we see it as we walk through our streets, it sits behind the windows of most jewellery stores and yet so few people know where it all began. Before gold trading began, early humans used it as a tool. Gold was first discovered as yellow nuggets, which is its natural state, and was often found in streams. Because of its great malleability and resistance to tarnish, gold quickly became a popular sign of wealth all around the world.

Archaeologists have discovered gold jewellery in southern Iraq that dates back to 3000 BCE. It is also widely known that kings in ancient Egypt used a lot of gold in both their life and death. It wasn’t until around 1500 BCE that gold became a trade commodity. Gold mining became a worldwide phenomenon in the 19th century and 65 per cent of the gold in circulation in the world was mined after 1950. The limited supply of gold therefore only adds to its rarity.

In 1946, the price of gold was at $35 per ounce and the US dollar became backed by gold. However, by 1971, there was no longer enough gold to do this for every single dollar bill so the US dollar became a ‘fiat’ currency. US citizens were allowed to trade gold in 1974 when the ban on ownership of gold bars was lifted. Gold is popular for its rarity and particularly so within the jewellery industry, as demand for gold jewellery is still as high as ever, with people still trading their gold with online sites such as Albemarle Bond, which is one of the UK’s largest pawnbrokers and jewellers.

The price of gold was at $1913.50 in August 2011, but the price of gold constantly fluctuates. It is unclear when the gold standard was first established. In Sir Isaac Newton’s system of measurement, he compared the value of gold to silver, which has led to some people seeing this as when the gold standard first began, in 1717. Political movements against this began in the 1890’s when paper-based currencies became the norm. The gold standard has sometimes helped the international money market, while at other times it caused problems.