History of Gold

Around 4000 B.C., people in Eastern and Central Europe first began using gold. One thousand years later, the Egyptians had become experts in changing the shape of gold by beating it into leaf or casting it using the lost-wax method, something still done today. They also combined it with other metals, which allowed them to alter its color and hardness. In Southern Iraq, the Sumer civilization also started to use gold to create a variety of pieces whose intricacy is still reflected in contemporary stylings.

By 2500 B.C. gold had been recognized as a symbol of royal wealth; therefore gold jewelry accompanied Djer, the king of the First Egyptian Dynasty, into his tomb at Abydos, Egypt. Over the next thousand years Egypt became rich thanks to the gold found in its Nubia regions.

Around 1500 B.C., international traders began to recognize gold as the standard medium of exchange. In the Middle East, the Shekel became the standard unit of measure. This coin, which originally weighed in as 11.3 grams of gold contained electrum (naturally occurring alloy), which was approximately two-thirds gold and one-third silver. Despite gold's value on the international market, in 1352 B.C., the Egyptians laid Tutankhamun to rest in a human-shaped gold sarcophagus, which they entombed in a pyramid decorated with even more gold. When the tomb was later opened in 1922 A.D., explorers discovered a 2,448 lb. gold coffin and hundreds of gold objects, including a mask, which would soon become a famous symbol of the young king.

In 1350 B.C. the use of gold as money spread more widely as the Babylonians learned how to use fire to test its purity. China legalized squares of gold as currency in 1091 B.C., while in 560 B.C. Lydia (kingdom of Asia Minor) minted the first pure gold coins. Almost five hundred years later in 58 B.C., Julius Caesar made use of gold's acceptance as currency by seizing a sufficient amount in Gaul (France) to repay Rome's debts. Two years later, the Romans issued the Aureus, their own gold coin.

A.D.

Following the fall of the Roman Empire and subsequent Dark Ages, gold mining began again in central France and Europe during the Byzantine Empire (600 – 699 A.D.) Despite the long period since gold had last been used, the new artisans were able to recreate the techniques used to produce complicated icons and artifacts.

By around 1100 Venice had joined the picture by using its favorable location, via trade routes to the east, to become the world's leading gold bullion market. In 1284, it introduced the gold Ducat, which for the next five centuries served as the world's most popular coin. Great Britain also became active in the minting business at this time by issuing the Florin as its first major gold coin, followed by the: Noble, Angel, Crown, and Guinea. To keep up with the competing nations, in 1511 King Ferdinand of Spain launched more explorers towards the Western Hemisphere to get more gold. Gold used as currency further stabilized in 1717 when Isaac Newton, Master of the London Mint, established a price for it that would endure for two centuries.

In 1787, the newly established America bolstered its sovereignty when goldsmith Ephraim Brasher struck the first U.S. gold coin. The U.S. adopted the Coinage Act in 1792 which placed the nation on a bimetallic silver/gold standard in which the U.S. Dollar was defined as the equivalent of 24.75 grains of fine gold or 371.25 grains of fine silver.

In 1803, North Carolina became the first state to have a gold rush. Until 1828 the state supplied the U.S. Mint in Philadelphia with all the domestic gold used for currency.

When James Marshall found specks of gold in the water at John Sutter's sawmill (near the joining of the American and Sacramento Rivers) in 1848, the California gold rush began. It continued into Nevada in 1859 with the discovery of the Comstock Lode of gold and silver. Nevada would use this discovery to propel it towards its 1864 statehood, and in 1961 when mining began in Carlin Trend, it would become the largest gold-mining state in the U.S.

Other discoveries were being made internationally. In 1850, Edward Hammong Hargraves, a California prospector, made good his boast that he would find gold in Australia within one week of his landing in New South Wales. South Africa finally became recognized as one of the world's gold producers in 1886 when George Harrison discovered it while digging stones to build a house. Scotland contributed to the growing industry in 1997 when Glasgow doctors: Robert and William Forrest and chemist John S. MacArthur patented a process to use cyanide to extract gold from ore.

In 1896 the world's focus returned again to the U.S. as two prospectors discovered gold while fishing in the Klondike River in northern Canada. Because rumors abounded that even more gold could be found farther south in Alaska's Yukon, the Alaska Gold Rush began, which became the final gold rush of the century.

At the turn of the century, the U.S. finally adopted the gold standard. In 1933, this adoption prompted President Franklin D. Roosevelt to ban gold exporting and stop the convertibility of dollar bills into gold. U.S. citizens were also required to hand in all the gold they possessed. The President established a daily price for gold, and in 1934 fixed its price at $35 per ounce.

While the U.S. was struggling with the logistics of life on the gold standard, other entities were discovering different uses for gold. In 1903 the Engelhard Corporation revealed an organic medium to print gold on surfaces. Although used initially solely for decoration, the medium later became the basis for microcircuit printing technology. A 1927 medical study in France confirmed that gold could be effectively used in treating rheumatoid arthritis. In 1935 AT&T determined that Western Electric Alloy #1 (69% gold, 25% silver and 6% platinum) could be universally used in all switching contacts for AT&T telecommunications equipment.

Almost half a century after the U.S. adopted the gold standard; an international gold exchange standard was created in 1944 by the Bretton Woods agreement, which also established two new international organizations, the International Monetary Fund (IMF) and the World Bank. The new standard set par values for currencies in terms of gold. Member countries were then required to convert the foreign official holdings of their currencies into gold at these par values.

More uses for gold continued to be found including the assembly of the first transistor in 1947 by AT&T Bell Laboratories, which employed gold contacts. In 1960, gold-coated mirrors allowed the laser to maximize infrared reflection. The 1968 Intel microchip had 1,024 transistors connected by gold circuits, while the Apollo 11 astronauts benefited from a gold coating on their visors to protect their eyes from sunlight during the first moon landing in 1969.

By 1970, gold had been incorporated into the invention of the Charged Coupled Device where it was used to collect electrons generated by light. This device eventually was used in video cameras and hundreds of other products. More biological roles for gold were revealed in 1971 when Amersham Corporation of Illinois created the Colloidal Gold Marker System, in which tiny pieces of gold are used in health research laboratories worldwide to mark or tag specific proteins to establish their function in the human body, so as to better treat diseases.

On March 15, 1968, central banks abandoned the $35 per troy fixed price of gold and let it free float. The U.S. Dollar was removed from the gold standard in 1973, when gold prices were allowed to float free. By June 1973, gold had reached more than $120 per ounce on the London market. On December 31, 1974, the U.S. ended its ban on individual gold ownership. In New York, gold reached its historic high price of $870 during the day of January 21, 1980.

In the 1980's and beyond, more uses for gold were discovered, including coating for compact discs (1986) and contacts on automobile airbags (1987) . These trends continued when gold was used to coat mirrors to examine the planets of our solar system, including the ones on the Mars Global Surveyor (1996) and the Keck Observatory aimed at Neptune and Uranus (2000).

In 1997, the U.S. enacted the Taxpayers Relief Act, which permitted people with Individual Retirement Accounts to acquire gold bullion coins and bars for their accounts as long as their investments have a fineness equal to or exceeding 99.5% gold.

Please take a moment to compare the history of your current investments to that of gold. You will find that all of your current assets have been tracked for less then 150 years or 3% as long as gold.

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