The History of gold

The history of gold begins in remote antiquity. But without hard archaeological evidence to pinpoint the time and place of man’s first happy encounter with the yellow metal, we can only conjecture about those persons, who at various places and at different times first came upon native gold. Experts of fossil study have observed that bits of natural gold were found in Spanish caves used by the Paleolithic Man about 40,000 B.C.
Consequently, it is not surprising that historical sources cannot agree on the precise date that gold was first used.

One states that gold’s recorded discovery occurred circa 6000 B.C. Another mentions that the pharaohs and temple priests used the relic metal for adornment in ancient Egypt circa 3000 B.C. However, it is curious to note that the early Egyptian’s medium of exchange was not gold but barley.

The first use of gold as money in 700 B.C. is claimed by the citizens of the Kingdom of Lydia (western Turkey). Surely, you remember the kingdom of the famous fortune seeking King Croesus – circa 550 B.C.

In 1792 the U.S. Congress adopted a bimetallic standard (gold and silver) for the new nation’s currency – with gold valued at $19.30 per troy ounce. This remained essentially unchanged until 1834, when the price of gold was raised to the $20.67 level which held for the next 100 years. It was not until 1934 that President Franklin Delano Roosevelt devalued the dollar by raising the price of gold to $35 per ounce.

Relative to today’s world economic conditions, it is imperative to remember that F.D.R.’s stated purpose for dramatically increasing the value of gold was to boost commodity prices (especially farm products) and create more employment for the millions who were suffering the devastating effects of the Great Depression.

In December 1971 representatives of the ten most industrialized nations met in Washington D.C. It was their express purpose to take whatever measures in order to improve international economic conditions. The now famous Smithsonian Agreement accorded an immediate hike in the value of gold from $35 to $38 per ounce. President Richard Nixon hailed it as “the most significant monetary agreement in the history of the world.” Unfortunately, it resulted in a measure too little and too late. International economic conditions continued to deteriorate, forcing the U.S. Government in 1973 to devalue the dollar a second time by raising the official price of gold to $42.22 per ounce. Finally, all international currencies were allowed to “float” freely against gold. By June of that year the London Gold Fixing had risen to an unprecedented $120 per ounce. Exploding demand during the following months set the stage for the creation of gold futures trading on the COMEX in January 1975.

Gold Mining

Ninety per cent of the labour force involved in gold mining is made up of artisanal and small-scale miners who produce between 200-300 tonnes of gold each year. Around 70% of this is used to make jewellery, with consumers across the globe spending a whopping $135 billion a year on gold jewellery!

An estimated 100 million people worldwide rely on small-scale mining for their livelihoods and to support their families and communities. Small-scale miners often work long days and in difficult and sometimes hazardous conditions. There are serious health risks associated with the improper handling of toxic mercury and cyanide, which can be used in the extraction process.

Miners struggle to attract the finance or generate sufficient profits needed to invest in their operations or safer, more efficient technology.