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The History of Gold: What To Know

The History of Gold: What To Know

Gold is an extraordinary precious metal that has been valued dating back to prehistoric times. It’s been mined for over 5,000 years and discovered on every continent. It carries different names, from “Excrements of Gods” by the Aztecs and “Sweat of the Sun” by the Inca. In Ancient Greece, the Golden Fleece of the gods captured the imaginations of citizens. But, what is gold? Where did it come from? And how did it evolve into the modern asset it is today?

What Is Gold? 

The scientific definition of gold leads us to the periodic table of chemical elements. On the periodic table, gold is atomic number 79. Its symbol? Au, which stands for aurum in Latin. 

Gold is a very soft metal with a melting point of 1,948 degrees Fahrenheit (1,064 degrees Celsius). You are most familiar with it due to its yellow color and shine. There are other color variations of gold, such as white gold and rose gold, but the gold is mixed with other metals to obtain a different color. For example, white gold is a mixture of gold and silver or palladium, whereas rose gold contains copper. There are even silver coins with gold coating.

Don’t be fooled by fools gold! Fools gold is a form of pyrite. It has similar features to gold, including the color, but it has a rough surface. It contains crystals too!

Gold Purity and Fineness 

Purity and fineness determine gold’s value and the price of gold on the market. Both are typically stamped or hallmarked on the gold for awareness and credibility by the refiner.

Gold Karat 

Ever heard of a karat? The karat represents how pure the gold is. It ranges on a scale from 0 - 24. The higher the level of purity, or karat, the more valuable, soft, and pure the gold is. If it's mint gold, it's likely going to be very high if not the highest number on the scale. As you move to the lower end of the scale, additional alloys, such as electrum, are mixed with the gold making it stronger and at risk of corrosion or tarnish.

Whether purchasing gold bullion or gold dust, you want that magic 24 on the assay report.

Gold Fineness 

A system used to measure the fineness of gold is known as the Millesimal Fineness system. This system ranks gold in parts per thousand and is represented by the following numbers: 333, 375, 417, 583, 585, 625, 750, 833, 875, 916, 958, and 999. Numbers outside of those listed here assume that the metal is not gold but another alloy.

Gold fineness is a huge determining factor in setting gold prices. 

Where Does Gold Come From? 

Gold is found beneath our feet, if you know where to look. Today, gold is found in Nevada and Alaska in United States, Russia, Australia, Canada, and South Africa. South Africa holds a record with gold, leading with 40% of it mined within its rocks over time. 

The first record of humans discovering gold dates to 4,000 B.C. in Eastern Europe. But Ancient Egypt was the first civilization to begin using gold as a medium of exchange with coinage. Great Britain and the U.S. followed suit. By 1792, the U.S. had passed the Coinage Act, enacting a bi-metal currency standard for the country (this was done away with during the 1970s in favor of fiat). 

In the 1700s, Brazil had the highest rate of gold production of any country in the world. In 1869, the largest gold nugget recorded was discovered in Victoria, Australia. It was named “Welcome Stranger,” weighing approximately 172 pounds in solid form. Later in 1980, another gold nugget was found weighing 60 pounds and is on display in Las Vegas. This one is known as Hand of Faith and is the largest known in existence today.

The biggest holders of gold are the U.S., Germany, Italy, France, and Russia. China and Switzerland are close behind.

Gold Mining and Refining

Gold mining is a process. 

First, there is the exploration and discovery of gold. This is a time-consuming stage since you can’t mine something if it isn’t there. 

Once the gold is discovered, the development stage begins. Teams come together to determine a plan and prepare for construction. Just like any other type of construction site, permits and licenses permits and licenses are obtained before digging or drilling. This is another stage that requires patience and time. It can take several years to receive approval to move onto the next step, the operation.

Ready to dig? Great! The operation stage is where the excavating takes place. As the ore gets removed from the mine, it is handled and processed from the rock into a metallic alloy, known as a doré. The operation takes approximately 10-30 years, representing the life cycle of the mine.

The deepest gold mine known in the world is the Mponeng Mine, located in South Africa. Temperatures in the mine reach up to 140 degrees Fahrenheit. Ice is pumped into the mine to keep the temperature tolerable. As to its depth, imagine traveling on an elevator that takes more than an hour to reach the bottom of the mine?  The mine has a vertical depth of two and a half miles below the Earth’s surface. For a visual, compare that to ten Empire State Buildings! 

What happens to the gold after it has been mined? The majority ends up at a refinery. The refinery is responsible for melting the gold and molding it to its future shape or form. 

Why Is Gold Rare? 

Gold is one of the rarest metals on Earth. It’s rarer than diamonds. To obtain commercial quantities, there is a tremendous commitment to digging. To understand its rarity, you need to have a perspective of its weight.

The Weight of Gold 

Let’s put it into perspective. One ton of rock equals six grams of gold. Therefore, to obtain one ounce of gold, you need to dig approximately five tons of rock! Are you up for the challenge?

Gold is rare because of its physical make-up. It is a descendant of the stars resting inside them. Through a process known as nuclear fusion, gold is created. Going back into history, nuclear fusion began with The Big Bang Theory. It is a process that would mature over many years when two neutron stars would collide. The collision created the solar system we know today, including Earth. 

Fun fact: Gold can be found at the Earth’s core, locked away under a few thousand miles of rock.

What Is Gold Used For? 

One of the first uses of gold dates back to 4,000 B.C. It was used to fashion jewelry. Some jewelry was state of the art. Others varied in style. It served as a sign of grandeur and royalty.

Gold is used as currency, taking the shape of gold coins or gold bars, but it has other functions. For example, jewelers use it to craft jewelry. Dentists use it to build crowns for teeth, and it is even edible.

Did you know that gold is a conductor of heat and electricity? That’s right. Gold is not thought of as a novelty in today’s world.  Because gold is pliable and soft enough to shape, it is easily flattened into sheets or converted into wires. It’s a reliable choice when it comes to electronics too. Look around you. If you have a computer, a microwave, or a phone, then you have a small quantity of gold as well. 

Gold reserves also play an important role in reserve management at central banks and keeping economies stable.

Gold As Currency

Gold progressively made its way from just a rock to form of currency. Around 1,500 BC, it embarked on its journey. It was recognized as a form of trade in the Middle East. A coin known as the Shekel was born. The Shekel was not pure gold but two-thirds gold and one-third silver.  

Fast forward to 1,091 BC, China legalizes gold as a form of money, shaping it into little squares. Later in 500 BC King Croesus of Lydia circulated gold coins throughout many countries, long before the introduction of paper money.

By the late 19th century, countries were looking for ways to provide stable exchange rates and promotion of trade. They fixed the value of their paper currencies based on the quantity of gold they held, using a variable exchange rate. This system became known as The Gold Standard. The Gold Standard lasted for nearly 100 years. People were encouraged to turn in their paper currency for gold until the World Wars began and the Great Depression followed. 

In July of 1944, another system took flight. Forty-four nations came together, creating a new international monetary system known as the Bretton Woods System. Bretton Woods is a place, not a person. It is located in New Hampshire. This system implemented a fixed exchange rate where the value of gold would determine the basis for the dollar. This system was later converted to the World Bank Group and International Monetary Fund (IMF).

In 1971, President Nixon announced that the US Government would end the fixed value. By 1976, the Gold Standard ended. Too many years of inflation isolated the value of the dollar from gold. The systems were replaced by fiat money, meaning money not backed by a commodity such as gold or silver. 

The Bottom Line 

Gold remains a popular, valuable, sought-out precious metal. It is found all over the world, buried deep under the Earth’s surface. Mining gold is a process that can take many years from start to finish. Because of this, gold holds its value. Its uses vary from being special and symbolic to being a form of financial investment. 

Gold remains on the rise and is a great investment. Have you had an interest in investing in gold but couldn’t upfront the cost? Options are available to you at Acre Gold. Visit our webpage today for more information. 

 

Sources:

The History of Gold

The History of Gold | Records back to 1600

Gold Fun Facts | AMNH

24 Facts About Gold

10 Gold Facts That Will Floor You | Buy Gold

Gold - Element information, properties and uses | Periodic Table

25WORDS : GOLD Gold, Au, atomic number 79, a transition metal that was used for many things such as money, and it mostly doesn't

Creation of the Bretton Woods System

Copper Conducts Electricity Better, So Why Do We Use Gold In Electronics?

The Secret Life of Gold

The California Gold Rush | American Experience

FDR Takes United States Off Gold Standard - HISTORY

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