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2018
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Gold Through the Ages... Civilization’s Love Affair with the Yellow Metal
Gold artifacts are found in the Varna Necropolis, a gravesite in present-day Bulgaria (pictured right). These are the earliest evidence of mankind’s ornamental use of gold. The Sumer civilization came into existence around 5,000 years ago in Mesopotamia and used gold for jewelry and headdresses. 2600 B.C. – 1500 B.C. Egyptians are the first gold miners. Hieroglyphics depicting gold date back to 2,600 B.C. The vast quantity of gold discovered in the Nubia region makes Egypt wealthy and establishes gold as a standard for international trade.
1091 B.C. Small squares of gold are legalized in China as a form of money. The Ying Yuan is one of these early forms of gold currency.
560 B.C. – 202 B.C. Pure gold coins are minted by King Croesus of Lydia in modern-day Turkey. Soon after, the Greeks begin mining gold in the Mediterranean and Middle East. The Roman Empire wins access to lucrative mining regions in Spain and increases gold production.
58 B.C. – 400 A.D. Emperor Julius Caesar brings back enough gold from his victory in Gaul (present-day France and its neighboring countries) to pay each of his soldiers 200 gold coins and repay all of Rome’s debts. The Aureus gold coin is widely issued and remains a common currency of Rome until Constantine replaced it with the Solidus in 309 A.D.
788 A.D. Interest in gold wanes during the Dark Ages, but Charlemagne uses vast quantities of gold stolen from conquered kingdoms to take control of nearly all of Western Europe.
1284 - 1300 The gold ducat is introduced in Venice and Great Britain issues the florin, its first major gold coin. The ducat is the most popular gold coin in the world for the next five centuries. Mines controlled by the Mali Empire in West Africa supply about half of the Old World’s gold. When the empire’s ruler, Mansa Musa, travels to Mecca in 1324, he distributes so much gold that the price in Egypt is depressed for the decade.
1511 - 1700 King Ferdinand of Spain launches ambitious expeditions to the West, telling his explorers to “get gold. Humanely, if you can, but at all hazards, get gold.” This mandate leads to large-scale discoveries of gold in Brazil in 1700. Two decades later, Brazil is producing two-thirds of the world’s gold.
1799 Gold production begins in the United States after a 17-pound gold nugget is found in Carbarrus County, North Carolina. Four years later, a gold discovery at Little Meadow Creek in North Carolina sparks the first U.S. gold rush.
1848 James Marshall finds gold flakes in the American River while building John Sutter’s sawmill in Coloma, California. The discovery marks the start of a new gold era. The gold rush brought 300,000 people to California. Nearly 90 percent of total gold production follows this discovery. Beginning in 1897, tens of thousands of Americans rush north after the rich Klondike gold deposits are discovered in Canada’s Yukon Territory.
1886 George Harrison discovers gold in South Africa while gathering stones to build a house. By 1898, South Africa is the world’s largest gold producer. Over the years, it supplies nearly 40 percent of all gold ever produced.
1900 – 1925 The United States passes the Gold Standard Act in 1900, establishing gold as the tangible asset backing paper money. This act sets a standard value in gold for the U.S. dollar and establishes a fixed exchange rate with other countries on the gold standard. The U.S. and Great Britain, among others, suspend the gold standard during World War I. Great Britain returns to the gold standard in 1925, but abandons it six years later.
1933 - 1937 President Franklin D. Roosevelt makes it illegal for U.S. citizens to own more than a small amount of gold coins, bullion or certificates. Citizens are compelled to sell their gold to the Treasury at the official exchange rate of $20.67 per troy ounce. The Gold Reserve Act of 1934 halts the minting of all gold coins and raises the price of gold to $35 per ounce, where it remains until 1971. After acquiring the nation’s gold, the U.S. government builds Fort Knox in Kentucky in 1937 to store its wealth.
1940 Fearing Nazi invasion, the U.K. ships as much as 1,500 metric tons of gold across the Atlantic to be stored in Canada’s central bank in Ottawa. This shipment is worth a mind-boggling $160 billion in 2017 dollars, making it the largest movement of physical wealth in history.
1944 The Bretton Woods Conference creates an international monetary system and establishes a fixed exchange rate in gold for major currencies. It also founds the International Monetary Fund (IMF) and the World Bank. Member countries are required to guarantee convertibility of their currencies to gold.
1967 The first South African Krugerrands are produced, but anti-apartheid laws make them illegal imports into many Western countries. Krugerrands aren’t available in the U.S. until 1975.
1971 President Richard Nixon closes the “gold window,” effectively ending the U.S. dollar’s convertibility into gold. The fixed dollar-gold exchange rate also ends. In 1975, the U.S. government officially lifts its prohibitions on individual ownership and trading of gold.
1979 The Canadian Gold Maple Leaf debuts as the world’s second gold bullion coin. At nearly 100 percent pure gold, the Maple Leaf becomes the world’s leading gold coin in 1985, when South Africa stops minting the Krugerrand.
1980 Gold hits a then-record high of $870 an ounce during a stressful period both economically (U.S. double-digit inflation, stagnant growth) and politically (Iran hostage crisis and Soviet invasion of Afghanistan). The gold price retreats a short time later, trading in the $300 to $500 range for most of the decade.
1999 Gold tumbles to a 20-year low of $252.80 due to fears that governments might dump large amounts of gold on the market. Later in the year, gold jumps nearly 25 percent after 15 large central banks sign the first Central Bank Gold Agreement (CBGA), which set annual sales limits. 2001 China deregulates its gold market, and by 2007, it ends South Africa’s century-long reign as the world’s top gold producer. In 2010, China becomes the world’s top consumer of gold.
2004 The first bullion-backed exchange traded fund (ETF) is launched in the U.S., joining similar funds in London and Australia. By 2009, investment demand for gold reaches nearly $55 billion.
2008 - 2010 A global credit crisis and fear of currency devaluation sends gold prices above the $1,000 mark for the first time in March 2008. In early 2010, gold prices breach the $1,200 mark and hit new then-record highs on a consistent basis for several weeks.
2011 Gold prices climb higher throughout the year, reaching an all-time high in nominal terms above $1,900 an ounce in early September 2011. Gold prices have been above $1,000 an ounce since September 2009.
2015 The Federal Reserve, under Chief Janet Yellen, raises interest rates for the first time in almost a decade. As a result, in December 2017, gold prices fell 2.5 percent to $1,049.60, the lowest since 2009.
2016 In December 2016, the Shariah Standard on Gold is introduced to Islamic investors. Thanks to the Standard, Islamic investors can verify if an asset adheres to relevant Shariah rulings for gold-based financial products. This opens up gold investing to the international Muslim community for the first time.
2018 The Texas Bullion Depository, the first of its kind in the U.S., opens to the public in Austin. As of April 2018, U.S. citizens and residents can store their gold bars, coins and/or jewelry in what is being called the “world’s most advanced depository.”
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