The History of Gold
Gold has been an obsession of humankind since prehistoric times and is believed to have been the first metal used by humans for ornamental and practical purposes. From the ancient Egyptians to the Californian gold rush, it has played a fascinating and, at times, controversial role in world history and culture for thousands of years.
The following represents some of the most important milestones in the storied history of gold:
2600 BC – Egyptian Hieroglyphs Describe Gold
The hieroglyphs were considered a formal writing system used by the ancient Egyptians that contained a combination of logographic and alphabetic elements. Egyptian hieroglyphs from as early as 2600 BC describe gold, which King Tushratta of the Mitanni claimed to be “more plentiful than dirt” in Egypt. Egypt and especially Nubia had the resources to make them major gold-producing empires for much of history.
650 BC – The Establishment of Lydian Coinage
Lydia was an Iron Age kingdom of western Asia Minor located generally east of ancient Ionia in the modern Turkish provinces of Manisa and inland Izmir. Lydians were the first people to introduce the use of gold and silver coin, and the first to establish retail shops in permanent locations. It is believed that these first stamped coins were minted around 650-600 BC.
150 AD – Romans Develop New Methods for Extracting Gold
The Romans developed what would have to be considered technically innovative methods for extracting gold on a large scale using hydraulic mining methods, especially in Spain from 25 BC onwards and in Romania from 150 AD onwards.
1284 – Venice Introduces the Gold Ducat
The first issue of this coin is thought to have been under Roger II of Sicily, who, in 1140 AD, coined ducats bearing the figure of Christ. The inscription on the coin, roughly translated means “O Christ, let this duchy which you rule be dedicated to you.”
The ducat was introduced by the Republic of Venice in 1284. During the Middle Ages the ducat gained significant popularity, as it was easy to mint, and packed a lot of value in one relatively small coin. Several cities and small states in Europe – mostly Eastern Europe in the Middle Ages – issued multiple, single and fractional ducats. The standard of coin was adopted in Hungary and, for a long time, all foreign coins bore the name Ongri, Italian for “Hungarian”, where world trade, at this period in time, was concentrated.
1324 – Gold Price is Depressed in Egypt
The Mali Empire in Africa was famed throughout the old world for its large amounts of gold. Mansa Musa, ruler of the empire (1312–1337 AD) became famous throughout the old world for his great journey to Mecca in 1324. When he passed through Cairo in July of 1324 he was reportedly accompanied by a camel train that included thousands of people and nearly a hundred camels. He gave away so much gold that it depressed the price in Egypt for over a decade.
1695 – Brazil Gold Rush Starts
The Brazil Gold Rush started when Bandeirantes discovered large gold deposits in the mountains of Minas Gerais. The Bandeirantes were adventurers that organized themselves into small groups to explore the Interior. Many Bandeirantes were of mixed Indian and European background who adopted the Indian ways, which permitted them to survive in the interior rain forest.
Over 400,000 Portuguese and half a million African slaves came to the gold region to mine. Many people abandoned the sugar plantations and towns in the Northeast Coast to take up the search in the gold region. By 1725, half the population of Brazil was living in Southern Brazil.
1717 – Isaac Newton Sets the Price of Gold
Newton moved to London to take up the post of warden of the Royal Mint in 1696, a position that he had obtained through the patronage of Charles Montagu. Newton became perhaps the best-known Master of the Mint, a position Newton held until his death on March 31, 1727. Newton took his position quite seriously, exercising his authority to reform the currency and punish clippers and counterfeiters.
1803 – Reed Gold Mine is Discovered
During the 19th century, gold rushes occurred whenever large gold deposits were discovered. The first documented discovery of gold in the United States was at the Reed Gold Mine near Georgeville, North Carolina in 1803. John Reed organized a small gold mining operation and soon afterward a slave named Peter found a 28-pound nugget. In 1831 he began underground mining. John Reed died rich in 1845 from the gold found on his property.
The last underground mining took place at the Reed Mine in 1912. To handle the large amount of gold found in the region and state from the 19th into the early 20th century, the Charlotte Mint was built in nearby Charlotte, North Carolina.
1829 – Georgia Gold Rush Starts
The Georgia Gold Rush was the first significant discovery in the United States. It started in 1829 in the present day Lumpkin County near county seat Dahlonega, and soon spread through the North Georgia mountains, following the Georgia Gold Belt.
Although the discovery of gold in Georgia in 1828 was the event that led to the Georgia Gold Rush, there was knowledge of gold in the North Georgia mountains much earlier. Since the 16th century, American Indians in Georgia told European explorers that the small amounts of gold which they possessed came from mountains of the interior. Some poorly documented accounts exist of Spanish or French mining gold in north Georgia between 1560 and 1690, but they are based on supposition and on rumors passed on by Indians.
1848 – California Gold Rush Begins
The California Gold Rush (1848–1855) began on January 24, 1848, when gold was discovered by James Wilson Marshall in Coloma, California. News of the discovery soon spread, resulting in some 300,000 men, women and children coming to California from the rest of the United States and abroad.
These early gold-seekers, called “forty-niners,” traveled to California by boat and in covered wagons across the continent, often facing substantial hardships along the way. While most of the newly-arrived were Americans, the Gold Rush attracted tens of thousands from Latin America, Europe, Australia and Asia. At first, the prospectors retrieved the gold from streams and riverbeds using simple techniques, such as panning. More sophisticated methods of gold recovery were later developed that were adopted around the world.
1851 – Queen Charlottes Gold Rush Starts
The Queen Charlottes Gold Rush in the southern Queen Charlotte Islands, now known as the North Coast of British Columbia, in 1851. The rush was touched off in March 1851 when a Haida man sold a 27 ounce nugget in Fort Victoria for 1,500 blankets.
The crew of the Hudson’s Bay Company vessel Una were the first to mine, discovering a vein 6.5 inches wide, 80 inches long at 25% gold content. As the crew began blasting, Haida would rush into the blast site to gather gold, competing with the crew, with the natives, according to the ship’s log book, grabbing crewmen by the legs to prevent them from reaching the gold. Half the gold found was abandoned, along with the mine, to avoid bloodshed between the two parties, but each had taken in roughly $1,500 in gold ($60,000 in modern dollars) as the yield from three blasts. On her return voyage, the Una was wrecked off Neah Bay and her gold lost. The Hudson’s Bay Company, having no other ship available, did not attempt to mine in the Charlottes again.
1851 – Central Otago Gold Rush
The Otago Gold Rush occurred during the 1860s in Central Otago, New Zealand. Constituting the country’s biggest gold strike, the discovery of gold in Otago led to a rapid influx of foreign miners – many of them veterans of other hunts for the precious metal in California and Victoria, Australia.
1858 – The Fraser Canyon Gold Rush
The Fraser Canyon Gold Rush began in 1858 after gold was discovered on the Thompson River in British Columbia at its confluence with the Nicoamen River, a few miles upstream from the Thompson’s confluence with the Fraser River at present-day Lytton.
1861 – The Colorado Gold Rush
The Colorado Gold Rush was the boom in gold prospecting and mining in the Pike’s Peak Country of western Kansas Territory and southwestern Nebraska Territory. It began in July 1858 and lasted until roughly the creation of the Colorado Territory on February 28, 1861. An estimated 100,000 gold seekers took part in this, one of the greatest gold rushes in North American history.
1881 – Africa Becomes Large Source for Gold Supply
Since the 1880s, South Africa has been the source for a large proportion of the world’s gold supply, with about 50% of all gold ever produced having come from South Africa. Production in 1970 accounted for 79% of the world supply, consisting of about 1,000 tons. However by 2007 production was just 272 tons. This sharp decline was due to the increasing difficulty of extraction, changing economic factors affecting the industry, and tightened safety auditing.
Economic gold extraction can be achieved from ore grades as little as 0.5 g/1000 kg (0.5 parts per million, ppm) on average in large easily mined deposits. Typical ore grades in open-pit mines are 1–5 g/1000 kg (1–5 ppm); ore grades in underground or hard rock mines are usually at least 3 g/1000 kg (3 ppm). Since ore grades of 30 g/1000 kg (30 ppm) are usually needed before gold is visible to the naked eye, in most gold mines the gold is invisible.
1886 – Witwatersrand Gold Rush
The Witwatersrand Gold Rush was a gold rush in 1886 that led to the establishment of Johannesburg, South Africa. Scientific studies have pointed to the fact that the “Golden Arc” which stretches from Johannesburg to Welkom was once a massive inland lake, and that silt and gold deposits from alluvial gold settled in the area to form the gold-rich deposits that South Africa is famous for.
1897 – Klondike Gold Rush
The Klondike Gold Rush was a frenzy of gold rush immigration to and for gold prospecting, along the Klondike River near Dawson City, Yukon, after gold was discovered there in the late 19th century. In total, about 12.5 million ounces of gold have been taken from the Klondike area in the century since its discovery.
1944 – International Gold Exchange Standard is Set
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states in the mid 20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.
Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.
Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.
The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing financial strain, the system collapsed in 1971, after the United States unilaterally terminated convertibility of the dollars to gold. This action caused considerable financial stress in the world economy and created the unique situation whereby the United States dollar became the “reserve currency” for the states which had signed the agreement.
1947 – First Transistor Using Gold is Produced
The first transistor, the building block for electronics, is assembled at AT&T Bell Laboratories. The device uses gold contacts pressed into a germanium surface.
Bell Laboratories is the research organization of Alcatel-Lucent and previously of the American Telephone & Telegraph Company (AT&T). It was an important milestone that set the wheels in motion for much of the technological advances that we embrace today.
1968 – Collapse of the Gold Pool
On March 17, 1968, economic circumstances caused the collapse of the gold pool, and a two-tiered pricing scheme was established whereby gold was still used to settle international accounts at the old $35.00 per troy ounce while the price of gold on the private market was allowed to fluctuate. This two-tiered pricing system was abandoned in 1975 when the price of gold was left to find its free-market level. Central banks still hold historical gold reserves as a store of value although the level has generally been declining.
2008 – A New Price Record is Set for Gold
On March 17, 2008 a new record high price for gold is hit at $1023 USD/oz. This overtook the previous record set in 1980 of $850 USD/oz. Today, gold is still hovering near those record levels.
The Future of Gold
Gold is too expensive to use by chance. Instead, it is used deliberately and only when less expensive substitutes can not be identified. As a result, once a use is found for gold it is rarely abandoned for another metal. This means that the number of uses for gold have been increasing over time. As our society requires more sophisticated and reliable materials our uses for gold will inevitably increase. This combination of growing demand, few suitable substitutes and limited supply will cause the value and importance of gold to increase steadily over time. It is for these reasons that gold is truly a metal of the future.
The Bottom Line
History has shown that gold has played a significant role in everything from daily trade to dentistry practices dating back almost 6000 years. Today, gold continues to be a highly prized commodity in the treatment of cancer, the advancement of communications and the exploration of space. Scientists continue to discover new applications of its unique properties – driving demand through new, innovative uses. Couple this with its renewed value as a stabilizing currency in ever-volatile global financial system and you have a material that force mining companies to push further and dig deeper than ever before. There has never been a better time to consider recycling unused and unwanted gold. A significant portion of the total world supply could be met through this means – saving our planet of almost inconceivable environmental consequences. It’s time we Rethink Recycle.