Ever since recorded history gold has been a highly valued element. Societies from different continents that knew nothing of each others existence valued gold as a valuable commodity and used gold in important rituals.
History of Gold
Over history gold has been used as currency, a store of value and in jewellery. Modern industrial uses include dentistry and electronics. Although the price of some metals (such as platinum) is much higher, gold has long been considered the most desirable of precious metals.
In recorded history gold has been mentioned in Egyptian hieroglyphs and in the Old and New Testament of the bible (including gifts from the magi). In Africa the Mali Empire was renown throughout the old world for its large gold deposits.
In Asia at the height of the Khmer Empire in the 1300's the temples of Angkor Wat were thought to be covered covered in gold leaf.
In Latin America the Spanish empire grew rich from gold in these newly conquered territories and European explorers were driven crazy searching for the fabled Eldorado with its abundance of gold.
During the 19th century, whenever large gold deposits were discovered gold rushes occurred. Mass immigration to gold fields turned towns into cities virtually overnight. Cities like San Francisco and Melbourne became grand with income from gold.
Gold price
For most of the 20th century the price of gold was determined by a system called the gold standard. Currencies of most western countries were pegged to the price of gold. In 1975 the U.S Government removed the US Dollar from the gold standard, and gold was left to find its price on the free-market.
Since gold has been left to find its own price, its value has valued widely. Gold reached a record high of $850/oz in 1980, then it gradually declined to a low of $252.90/oz in 1999.
After the terrorist attacks of September 11 2001, the price of gold has gradually been rising once again, reaching $715.50/oz in May 2006.
Gold Supply
The largest gold depository in the world is in the U.S. The most famous gold depository is the U.S. Bullion Depository at Fort Knox. About 3% of the gold ever mined is held here. The U.S. Federal Reserve Bank in New York holds a similar amount.
It is estimated that the volume of all the known refined gold in the world would be the size of a single cube 20 m (66 ft) on a side (equivalent to 8000 m3). This is roughly the size of a tennis court.
Gold Today
Gold has always been a popular store of currency during uncertain times, hence the rise in price after September 11. Central banks still hold gold reserves as a store of value, although western banks have been gradually selling off their depositories.
The rise of China and India is also a factor in golds return to favour. Gold is more valued as a store of wealth in Asia, and as more of the population become more wealthy the demand for gold will also rise.
Another factor that influences the price of gold is in mining capacity. Most of the easy gold in the world has been mined. Mining for gold now requires deeper and more expensive mining techniques.
Over the millenia gold has seen countless other form of currencies and stores of wealth come and go. Gold though has stood the test of time, making it as desirable as ever for use in jewellery and for investors.
This article was written by James Clark, editor of Free Swiss Gold. Become a gold trader and get free gold to get started.
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