The oldest metal used by humans as specie or in ornaments and jewelry.
Gold is abundant in many places throughout the world, but the cost of mining the metal is often prohibitive. Gold is found in the form of dust, flakes, grains, and nuggets and is often mixed with other metals such as silver when found in the ground. Since the metal is not affected by moisture or oxygen, it is ideal for jewelry worn next to the skin.
The earliest pieces of jewelry located in burial tombs in both Egypt and Ur were made of gold. The skill of the goldsmith produced intricate pieces that combined gold with gemstones such as turquoise. The ancient Israelites, under the reign of King Solomon, used gold to decorate the pillars of the temple and the ornaments used in it. But perhaps the one ancient civilization where goldsmiths excelled was the Minoan culture. Gold was pounded into thin sheets used to produce masks with filigree work. Ornate jewelry and gold objects attracted traders from other parts of the Mediterranean, and the Minoans soon dominated trade throughout the region. The Greeks and the Romans used gold for jew elry for the upper classes. Roman jewelry included cameos, earrings, headdresses, and necklaces that contained gold and sometimes precious gemstones as well.
During the Middle Ages, gold from the sub-Saharan region was traded for salt. Ancient Ghana supplied much of the precious metal that was desired for the production of coinage by civilization around the Mediterranean. By the eleventh century, the Mali empire replaced Ghana as the supplier of gold. Arab traders crossed the Sahara with their caravans of camels to trade for the gold. They were not able to locate the gold mines since the rulers insisted that the location remain secret. Europeans used the gold for coin as well as jewelry. The Catholic Church used some of the gold in its artwork and in the illuminated manuscripts. The introduction of gold into Mediterranean economies did not produce an adverse effect until 1324–1325, when Mansa Musa, the ruler of Mali, arrived in Egypt with a ton of gold. Adding that much gold into the economy created inflation and an economic crisis.
After the discovery of the New World, gold flowed into the Spanish treasury in unregulated amounts. The Spanish monarchs, who had just forced the Jewish moneylenders with their knowledge of financial management out of the country, used the gold recklessly. Between 1500 and 1650, more than 181 tons of gold and 16,000 tons of silver were transferred from the New World to Spain. Gold fueled the economy of not only Spain but also of England and Holland. English seadogs like Sir Francis Drake pirated bullion from the Spanish galleons that sailed once a year back to Spain laden with precious metals and other cargo. But in Spain the introduction of so much gold created inflation and became the downfall of its empire.
The availability of gold bullion allowed European nations to mint coin that was used as specie for the payment of goods. The use of gold allowed west European nations to expand their markets, although on a limited basis, into a global economy. However, gold was still limited in supply, and these nations turned to mercantilism to protect the wealth that they had gained.
During the seventeenth century, gold was used widely throughout the Mughal empire. In
China, gold was used primarily by royalty of the various dynasties beginning in the common era. The Chinese introduced the use of gold and goldsmith skills to Korea, but the Japanese never used gold on an extensive basis.
During the nineteenth century, Americans pushed westward. While the United States was engaged in war with Mexico over the annexation of Texas, Americans declared California a free republic. In 1849, prospectors discovered gold in the hills of California and a gold rush followed. The introduction of gold into the U.S. economy helped the nation, especially since world economies had begun to adopt the gold standard, with Great Britain being the first in 1821. By the 1870s, the other European countries had agreed that a nation would not issue more currency than the amount that was backed by gold. When the United States began purchasing silver in the 1890s, foreign investors became reluctant to purchase U.S. bonds. President Grover Cleveland pushed for the repeal of the Sherman Silver Purchase Act after the panic of 1893 brought the nation close to bankruptcy. The use of the gold standard continued until World War I, when European nations suspended the redemption of currency in gold. The United States continued to honor the arrangement except during the Great Depression, when gold exports were halted. In 1971, the United States, facing stagflation, abandoned the gold standard and was the last nation to do so.
During the twentieth century, the primary producer of gold (and diamonds) was South Africa. The country operated under a system of apartheid, and the international community decided to place an embargo on South African gold until the system was abolished in 1991.
Meanwhile, the price of gold was affected by the financial crises of the 1980s. The price of gold rose to over $800 an ounce in the early 1980s. Since then, the price dropped to around $200 an ounce before rebounding in December 2003 to over $400 an ounce. Gold has been touted as a way of protecting one’s investment in the uncertain times after the 2001 terrorist attacks in New York and Washington, DC.
Cynthia Clark Northrup
See also: Discovery and Exploration.
Bordo, Michael D. The Gold Standard, Bretton Woods and Other Monetary Regimes: A Historical Appraisal. Cambridge, MA: National Bureau of Economic Research, 1993.
Crosby, Alfred. The Columbian Exchange: Biological and Cultural Consequences of 1492. Westport: Greenwood, 1972.
Pomeroy, William J. Apartheid, Imperialism, and African Freedom. New York: International, 1986.