How long has gold been used as money? That is an interesting question to ponder. Gold has always been an important component of the international monetary system. Keep reading if you are interested in finding out more about the history of gold!
The first gold coins were struck on the order of King Croesus of Lydia around 550 BC. Lydia is an area that is part of modern-day Turkey, and this is where the history of gold coins being used as an official form of currency dates back. Did you know that gold used to be circulated as a currency in many countries before the introduction of paper money?
Even when paper money was eventually introduced, currencies still used to have a link to gold. As such, the paper was always exchangeable for the gold on demand and used to retain the value of the paper money in reserve storage. This connection between money and gold has been in existence for a long time.
For instance, by the late 1800s, many of the major currencies in the world were fixed to gold at a certain price per ounce. This was the Gold Standard and was in existence in different forms for about a hundred years. The gold standard determined the free exchange of paper money and gold in relation to the financial system.
Most currencies retained this standard except for some countries such as the USA, where the currency is fixed to a different commodity altogether. However, the Gold Standard eventually collapsed, and in present times, it is only used by a few countries that have been using it for their currencies and financial systems.
Gold and Literature
Homer mentions gold as the glory of the immortals and a sign of wealth among ordinary humans. This is seen in the Illian and Odyssey. The first gold treasure map was created in Egypt in 1320 BC. In Genesis 2:10-12, there is mention of a river Pison out of Eden and the land of Havilah where there is gold. It is also reported that the gold of that land is good.
Gold and History
The Romans are known to have mined a great deal of gold throughout their empire, and they made advancements in gold mining techniques and technologies in a great way. They were the first empire to use water streams to mine hydraulically and are also responsible for building sluices and the first long toms. They also used to mine underground, and their main source of labor were prisoners of war, enslaved people, and convicts.
The Greeks are also known to have extensively mined gold from the Pillars of Hercules down to Asia Minor and Egypt. Even today, there are traces of these mines in places like Gibraltar. Most of the mines used to be state-owned, while others were privately owned and would instead pay a royalty to the state. The jewelry and Greek gold coinage that survives shows superb artistry and a great level of knowledge in crafting gold into different things.
As a monetary standard, gold made the world economy possible, and the concept of money made it possible for different economies to prosper and expand. Gold was used extensively for international trade, where it would be taken to India for its spices and China for its silk.
Gold Trade and Ancient Kingdoms
Around the 5th century, people began crossing the Sahara desert on camels. These soon developed into annual trade caravans, and gold happened to be the main commodity of the trans-Saharan trade. There was a surge in gold demand necessitated by the growing need for coinage. It is responsible for the rise of the Soninke empire of Ghana and a lot of Mediterranean economies that demanded gold.
Gold and salt were heavily traded, and Arab merchants visited Ghana and Mali in search of gold. Leaders and chiefs of ancient Ghanaian kingdoms accumulated a lot of wealth by keeping the core of the pure gold to themselves and leaving the rest of the unworked native gold to be marketed by their people.
The Mali empire followed in the wake of Ghana’s success, and they had a greater level of success with their gold trade. The main reason for their huge success is that they did not encourage the producers of the gold to convert to Islam since the traditional prospecting and production of the gold depended on traditional beliefs that were not related to Islam. Gold and salt were the main mediums of long-distance trade.
The gold market in the Sahara region came to crash in 1324-25 when Mansa Musa went to Cairo with a ton of gold. This was the richest man known in history, and the massive amount of gold that he carried on his pilgrimage to Mecca caused the entire gold market to come crashing down. His is a different, long story of gold, and it would be interesting to discuss it some other time. However, it is one of the instances in history where the supply of gold in any one place exceeded the demand in the market then.
There are many other instances of gold being used to do good as Mansa Musa did by building hospitals, schools, and Mosques on his pilgrimage, and the huge amount of gold that he took with him did a lot of good to the people he encountered on the way. Another notable place in history with a good record of gold in use is Timbuktu, whose coins were made of gold that did not have any superscription or stamp.
History of Gold
The history of gold is a long and interesting one. Covering all of it would require many of your evenings and tales to keep your vivid imagination ablaze with encounters of kingdoms coming to life due to the gold trade. There are many interesting things that gold has achieved in history, and it has been used to trade for thousands of years.
It was linked to the salt trade in Africa, while it was associated with spices in India. For China, gold used to be exchanged for Silk, which led to the establishment of the Silk Road. The Gold Standard has also made paper money possible in many world economies, and it has been used as a form of exchange for a lot of years.
Kingdoms have set out to find gold in different ways, and they have ventured out to other countries and kingdoms in search of precious metals. Gold still exists to this day, and you, too, can start making use of the precious metal. You can invest in it, buy it and store it in your home and even create a retirement investment plan based on gold.
I hope you found this article to be helpful and that it was an interesting read. If you have any questions, we will be more than happy to answer them below.
All the best,
Pete