Gold is a naturally occurring metal that has been part of myth, legend, finance and industry for thousands of years.
We have the following quotes from Wikipedia to set the scene:
“Gold is a chemical element with symbol Au (from Latin: aurum) and atomic number 79. In its purest form, it is a bright, slightly reddish yellow, dense, soft, malleable and ductile metal.
This metal has been a valuable and highly sought-after precious metal for coinage, jewelry, and other arts since long before the beginning of recorded history. In the past, a gold standard was often implemented as a monetary policy within and between nations, but gold coins ceased to be minted as a circulating currency in the 1930s, and the world gold standard was finally abandoned for a fiat currency system after 1976. The historical value of gold was rooted in its medium rarity, easy handling and minting, easy smelting, corrosion resistance, distinct color, and non-reactivity to other elements.”
The uses of gold are many and varied.
Gold as Money
Gold was first minted over 2500 years ago by King Croesus of Lydia (a land now part of Turkey). The 0.33 troy ounce coin was refined at Sardis and later reduced to 0.25 troy ounces.
The advantage of gold coins arose from the fact the value (the amount of gold) was carried within the coin. The coin itself had value. Nowadays, governments print paper money with a promise it has value as legal tender – the paper itself has no value.
Gold coins have been minted through the centuries by countries in Europe, Asia, the Americas, Africa and Australia. Gold became the universal symbol of currency and wealth the world over.
However, paper based currencies became a more practical solution for trade and commerce. Despite this, paper currencies were still backed by gold – they were pegged to a gold standard.
By the mid 1970’s the governments of the world did not see the gold standard as a practical arrangement. The U.S. dollar, the world’s reserve currency, was finally decoupled from the gold standard and since then all paper money has been issued as ‘fiat’ currency. A fiat currency is backed by a promise to pay rather than being backed by a precious metal.
However, nations around the world keep gold reserves because gold is seen as a “store of value”. The World Gold Council estimated in February 2015 that the U.S. held 8,133 tonnes of gold (the most of any nation), in second place Germany held 3,384 tonnes and the IMF was in 3rd place, holding 2,814 tonnes. Find out more at www.gold.org.
Gold as Jewelry and Art
Gold has been held in high regard in jewelry making for thousands of years. The Gold Council describes these key events:
In 2600 B.C. goldsmiths in ancient Mesopotamia (modern-day Iraq) craft one of the earliest pieces of gold jewellery, a burial headdress of lapis and carnelian beads with willow leaf-shaped gold pendants
200 A.D. Buddhism establishes itself in China under the western Han period (206 BC-220 A.D.). During the next three centuries gold leaf is used extensively to adorn shrines and images of the Buddha.
By the 12th century, goldsmiths still work primarily for the Church, leading to devotional pieces such as Nicholas of Verdun’s enamelled gold work for the altar at the church of Klostemeuberg.
In 1855 Carl Faberge made his first gold Imperial Easter Egg for Tsar Alexander III. The Hen Egg was commissioned as a gift from the Tsar to his wife, the Empress Maria Fedorovna.
By the mid-1950s, the Assay Office at Goldsmiths’ Hall has only hallmarked 400,000 gold articles. Over the next decade, growth takes off, and by 1966 they have hallmarked 4.3 million items.
The history of gold mining goes back thousands of years. There is evidence of gold mining at Sadriski in Southern Georgia, at the crossroads of Europe and Asia, some 3000 or 4000 years B.C.
In 70 AD, the Roman empire were using hydraulic mining techniques in Las Medulas, Spain to sift gold from alluvial deposits using aqueducts bored through a mountain to wash gold deposits from the ground. This was the most important gold mine in the Roman Empire at the time.
In the mid 19th century gold fever took hold in countries around the world from the Californian gold rush in 1849, the Klondike gold rush in 1896 to the Victorian gold rush in Australia in 1851.
Today hard rock mining accounts for the majority of gold mining around the world. This process involves extracting gold from rock, often in open pits, rather than sifted from alluvial deposits.
The largest open pit gold mine in the USA, the Goldstrike mine in Nevada, is owned by Barrick Corporation and in past years this mine has contributed 30% of all mining output in Nevada.
Uses of Gold in Industry
Gold has not only been used as money or jewelry. Throughout the centuries it has been used in a wide variety of industries and professions.
Gold has long been used in dentistry with records as far back as 700 B.C. showing that Etruscan dentists used gold wires to place replacement teeth in the mouth of a patient.
Gold is used in the visors of space helmets to protect the eyes and skin of astronauts from the intense, harmful radiation of the sun. Back on earth, gold is also used in purpose made windows to help shield the sun’s rays.
In more recent times gold has been used in electronic devices. Gold has excellent resistance to corrosion and conducts electricity well. This makes it the metal of choice for edge connectors on printed circuit boards (where a circuit board is joined to a motherboard). It is estimated there is about 1g of gold in about 40 mobile phones.