History of Gold and Silver
Precious Metals Coveted for Centuries - Central to Today's EconomyGold. A short, four-letter word that is huge in meaning. Wealth. Riches. Security.
As far as human history goes, gold has always been thus in mankind's collective mind. This precious metal has obsessed men and nations for centuries, building cultures, providing great power to some...and destroying cultures, sometimes the ones it had helped build.
Man's obsessive relationship with gold is believed to have begun in the Middle East, site of our first-known civilizations. The oldest pieces of gold jewelry were found in the tomb of Egyptian Queen Zer, as well as in the tomb of Sumerian Queen Puabi. The jewelry dates from the third millennium BC.
Fast forward to the1800s in Europe. Great Britain is the first (1821) to adopt the gold standard, thus helping to stabilize its economy because a gold standard means a country has to limit the amount of currency it issues to coincide with the amount of gold it holds in reserve. The rest of Europe follows and joins the gold standard in the 1870s.
The standard remains in effect until the end of World War I, with the U.S. the only nation that still honors the standard, with other countries being allowed to keep reserves of major currencies rather than gold. The Breton Woods system/International Monetary Fund of convertible currency replaces the Gold Standard worldwide after World War II. Switzerland is the last country to join the fund in 1999. As of 2012, there are 188 member countries.
There's More to Gold Than Money and Some Fun Gold FactsIn addition to its importance in financial markets, as well as for its simple hold on mankind's imagination, gold is used in dentistry, electronics, medicine, and in other fields and products. For example, because gold is so resistant to corrosion and its conductivity of electricity, it's often used in electric wiring and colored-glass production.
Some interesting facts about gold:
- More than 170,000 tons of gold have been mined on the planet since civilization began.
- 90 percent of that gold has been mined since the California Gold Rush of 1848-1849.
- Fort Knox holds 4,600 tons of gold, while the Federal Reserve holds 6,200.
- Gold increased in price 394 percent between December 2000 and December 2010.
- The largest true gold nugget (at 2,326 troy ounces) was found in Australia in 1869. It was dubbed the "Welcome Stranger."
- Gold is so rare (there's just an estimated 165,000 metric tons in existence above ground), that if every single ounce of it were placed next to each other to form a cube, the cube would only be a little more than 65 feet in any direction.
Silver: Gold's Shiny CousinLike gold, silver has been coveted by man for centuries. And, just like gold, it remains a great investment vehicle due to its relative rarity and the worldwide demand for it.
Silver became important the United States' financial markets in 1792 when Congress based the new country's currency on the silver dollar and its fixed relationship to gold. Silver was used in the nation's coinage until as late as 1965.
Looking forward, the 21st century will see silver play an important economic function as an industrial raw material, used in electrical and thermal conductivity, among other uses.
Silver prices have risen steeply since 2005, with strong investment in 2011 paving the way to a record annual average price for the precious metal that year. The average annual price for silver in 2011 was $35.12, more than twice the annual average price of $14.67 just two years before in 2009.