| Gold,
the first metal used by humans, has remained as one of the most
valued metals since prehistoric times. Egyptian
hieroglyphs from as early as 2600 BCE describe gold, which
king Tushratta of the Mitanni claimed was as "common
as dust" in Egypt. Egypt and Nubia had the resources
to make them major gold-producing areas for much of history.
Gold is also mentioned several times in the Old Testament.
The south-east corner of the Black Sea
was famed for its gold. Exploitation is said to date from
the time of Midas, and this gold was important in the establishment
of what is probably the world's earliest coinage in Lydia
between 643 and 630 BCE.
The European exploration of the Americas
was fueled in no small part by reports of the gold ornaments
displayed in great profusion by Native American peoples, especially
in Central America, Peru, and Colombia.
Gold has long been considered one of the
most precious metals, and its value has been used as the standard
for many currencies (known as the gold standard) in history.
Gold has been used as a symbol for purity, value, royalty,
and particularly roles that combine these properties (see
gold album). Gold as a sign of wealth and prestige was made
fun of by Thomas More in his treatise Utopia.
On that imaginary island, gold is so abundant
that it is used to make chains for slaves, tableware and lavatory-seats.
When ambassadors from other countries arrive, dressed in ostentatious
gold jewels and badges, the Utopians mistake them for menial
servants, paying homage instead to the most modestly-dressed
of their party.
There is an age-old tradition of biting
gold in order to test its authenticity. Although this is certainly
not a professional way of examining gold, the bite test should
score the gold because gold is considered a soft metal according
to the Mohs' scale of mineral hardness. The purer the gold
the easier it should be to mark it. Painted lead can cheat
this test because lead is softer than gold.
Gold in antiquity was relatively easy to
obtain geologically; however, 75% of all gold ever produced
has been extracted since 1910.[2] It has been estimated that
all the gold in the world that has ever been refined would
form a single cube 20 m (66 ft) a side (8000 m³).
During the 19th century, gold rushes occurred
whenever large gold deposits were discovered, including the
California, Colorado, Otago, Australian, Witwatersrand, Black
Hills, and Klondike gold rushes. Because of its historically
high value, much of the gold mined throughout history is still
in circulation in one form or another.
Like other precious metals, gold is measured
by troy weight and by grams. When it is alloyed with other
metals the term carat or karat is used to indicate the amount
of gold present, with 24 carats being pure gold and lower
ratings proportionally less.
The purity of a gold bar can also be expressed
as a decimal figure ranging from 0 to 1, known as the millesimal
fineness, such as 0.995.
The price of gold is determined on the
open market, but a procedure known as the Gold Fixing in London,
originating in 1919, provides a twice-daily benchmark figure
to the industry.
Historically gold was used to back currency;
in an economic system known as the gold standard, a certain
weight of gold was given the name of a unit of currency. For
a long period, the United States government set the value
of the US dollar so that one troy ounce was equal to $20.67
($664.56/kg), but in 1934 the dollar was revalued to $35.00
per troy ounce ($1125.27/kg). By 1961 it was becoming hard
to maintain this price, and a pool of US and European banks
agreed to manipulate the market to prevent further currency
devaluation against increased gold demand.
On 17 March 1968, economic circumstances
caused the collapse of the gold pool, and a two-tiered pricing
scheme was established whereby gold was still used to settle
international accounts at the old $35.00 per troy ounce ($1.13/g)
but the price of gold on the private market was allowed to
fluctuate; this two-tiered pricing system was abandoned in
1975 when the price of gold was left to find its free-market
level. Central banks still hold historical gold reserves as
a store of value although the level has generally been declining.
The largest gold depository in the world is that of the U.S.
Federal Reserve Bank in New York.
Since 1968 the price of gold on the open market has ranged
widely, with a record high of $850/oz ($27,300/kg) on 21 January
1980, to a low of $252.90/oz ($8,131/kg) on 21 June 1999 (London
Fixing).[5] On 11 May 2006 the London gold fixing was $715.50/oz.[6]
Over 2005 the World Gold Council estimated
total global gold supply to be 3,859 tonnes and demand to
be 3,754 tonnes, giving a surplus of 105 tonnes. |