Gold – All That Glitters And Becomes Part Of You
With the historic highs of gold price, typical when the metal is seen as a safe haven in times of political turmoil and economic instability, we thought readers may like to know a little more about this valuable metal.
Historically, the story of gold is as rich and varied as the metal itself. Wars have been fought for it, declarations of love made with it and items of both great beauty and usefulness made with it. It has been panned for, mined, collected, coveted, worn, inserted and reused throughout the ages in its various forms.
It is believed that the ancient Egyptians were the first goldsmiths, when in circa 3600 BC they carried out the first melting and fusing using blowpipes made from fire-resistant clay to heat the burning furnace. Then from 2600 BC we see early gold jewellery made from ancient Mesopotamia (these are on display in the British Museum). Advances in jewellery casting continued and we are all familiar with the wonderful creation of Tutankhamun's gold bejewelled funeral mask from 1223 BC.
Many of the ancient civilisations used gold as coinage, but it was not until 564 BC when King Croesus so improved refining techniques that he was able to mint the world's first standardised gold currency, allowing "Croesids" to become universally recognised and traded with confidence.
Then in 1300, the first hallmarking system, guaranteeing the quality of the precious metal, was established by the Goldsmiths of London, and in 1717 the UK gold standard commenced. This linked the government currency of the day at a fixed mint gold price of £3.17s.10 1/2d. per troy ounce of gold. Then between 1870 and 1900 all major countries (except China) switched to the gold standard.
Gold Price Stability
The price of gold remained remarkably stable for long periods of time. For example, when Sir Isaac Newton, as Master of the UK Mint, set the gold price in 1717, it remained effectively the same for almost two hundred years until 1914 (except during the Napoleonic Wars of 1797-1821). The official US Government gold price changed only four times from 1792, starting at USD19.75 per troy ounce, raised in 1834, 1934, 1972 and in 1973 to USD42.22.
Gold Price monthly averages 1883-1999
Gold Price 1995 to present (Dec 2011)
Graphs courtesy of kitco.com
In 1971 the United States suspended the US dollar's convertibility to gold and the world entered the present day system of floating exchange rates. In 1999 fifteen European central banks declared that gold would remain an important element of their reserves and collectively capped gold sales at 400 tonnes per year over the next five years. Then in 2004 SPDR (acronym for Standard & Poor's Depositary Receipts – SPDR is a trademark of Standard and Poor's Financial Services LLC, a subsidiary of McGraw-Hill Companies, Inc.) gold shares were launched, transforming the market – offering a secure and easy way to access the gold market. In 2010 SPDRs exceeded $55 billion in assets under management with gold price sustaining record high prices.
Some innovative uses for gold include dentistry from an early age (c.600 BC), in microchips, in space flight to protect sensitive instruments from radiation, for the treatment of arthritis, for heart surgery (in stents), and most recently, in 2011, in cars for catalytic converters in emissions control.
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Some Other Facts About Gold
- 166,600 is the total number of tonnes of gold mined since the beginning of civilisation, all of which could fit into a crate of 20 metres cubed.
- Over 90% of the world's gold has been mined since the 1849 California Gold Rush; of the 40,000 miners who joined the gold rush (called 49ers) only a few ever got rich.
- The largest ever true gold nugget weighted 2316 troy ounces when found at Moliagul in Australia in 1869. It was called the “Welcome Stranger”.
- The world's oceans are estimated to hold up to 15,000 tonnes of gold.
- Gold melts at 1064 degrees Centigrade and boils at 2808 degrees Centigrade.
- 100 million people worldwide depend on gold mining for their livelihood.
- Julius Caesar gave 200 gold coins to each of his soldiers from the spoils of war in defeating Gaul.
- The US Federal Reserve holds 6,200 tonnes of gold. Fort Knox holds almost as much.
- In 95 BC, Chinese Emperor Hsiao Wu I minted a gold commemorative piece to celebrate the sighting of a unicorn.
- 60% of the gold mined today becomes jewellery.
- Because of gold's unique conductivity, gold jewellery rapidly matches your body temperature, becoming part of you.
(Source: World Gold Council)
Gold Price Advice