April 24, 2014

Heritage


Despite its unrivalled properties, gold is an inert material. It does nothing until man discovers it, mines and refines it and bends it to his will. So the history of gold is very much the history of civilisation. Here are some points in time where that history was made.

c. 3600 BC

First smelting of gold

Egyptian goldsmiths carry out the first melting or fusing of ores in order to separate the metals inside. They use blowpipes made from fire-resistant clay to heat the smelting furnace.

564 BC

First international gold currency created

King Croesus develops improved gold refining techniques, permitting him to mint the world’s first standardised gold currency. Their uniform gold content allows ‘Croesids’ to become universally recognised and traded with confidence.

1370

The Great Bullion Famine begins

During the years 1370-1420, various major mines around Europe become completely exhausted. Mining and production of gold declines sharply throughout the region in a period known as ‘The Great Bullion Famine’.

1717

UK gold standard commences

Britain moves onto a de facto pure gold standard, as the government links the currency to gold at a fixed rate (establishing a mint price of 77 shillings, ten and a half pennies per ounce of gold).

1848

California Gold Rush begins

John Marshall discovers gold flakes while building a sawmill near Sacramento, California. The greatest gold rush of all time follows as 40,000 diggers flock to California from around the World.

1885

South African Gold Rush begins

While digging up stones to build a house, Australian miner George Harrison finds gold ore on Langlaagte farm near Johannesburg. Miners flock to the region. South Africa will go on to become the source of 40% of the world’s gold.

Image © Terry Davis

 

1870-1900

Adoption of gold standard

All major countries other than China switch to the gold standard, linking their currencies to gold. The practice of bimetallism is abandoned.

 

1925

Gold standard returns

The UK returns to the gold standard at pre-war parity of $4.86=£1 with sterling convertible to gold at 77sh 10.5d per standard ounce. This follows the country’s departure from the gold standard six years previously at the outbreak of World War I.

 

1933

Roosevelt suspends gold

President Roosevelt suspends US dollar convertibility to gold (gold at US$20.67/oz). The export of all transactions in, and the holding of gold by private individuals, is forbidden. Presidential proclamation makes the dollar convertible again in January 1934 at a new price of $35 per troy ounce.

 

 

1939

World War II closes gold market

The London gold market is closed on the outbreak of war, as at the beginning of World War II. The world will later return to a fixed system of exchange rates, this time with currencies fixed to the dollar and the dollar convertible into gold.

1961

First gold bonded microchips

 

1961

First gold in space

The first manned space flight uses gold to protect sensitive instruments from radiation. In 1980, 41kgs of gold is included in space shuttle construction through brazing alloys, fuel cell fabrication and electrical contacts.

 

1999

First Central Bank Gold Agreement

The First Central Bank Gold Agreement (CBGA) is agreed. 15 European central banks declare that gold will remain an important element of their reserves and collectively cap gold sales at 400 tonnes per year over next five years.

 

2003

K-gold launched in China

The World Gold Council creates an entirely new market segment with the launch of K-gold, the first 18k jewellery in China. The jewellery, in predominantly white and yellow gold, takes its inspiration from Italian design

 

2004

Launch of SPDR® Gold Shares

The market is transformed by an innovative, secure and easy way to access the gold market. Six years later SPDR® exceeds $55bn in assets under management.

2009

Central banks return to buying

In the second quarter of the year, central banks collectively become net purchasers of gold for the first time in two decades. This reflects a combination of slowing sales from European banks and growing purchases by emerging market countries.

Image © Lonely Planet Images

2010

Gold price sustains record highs

Fiat currencies are undermined by inflation fears and successive financial crises. The London pm fix achieves 35 separate successive highs in the year to date.