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Gold ( Sanskrit jval, Greek χρυσος (khrusos), Latin aurum, Anglo-Saxon gold, Chinese 金 (jin)) has been known and highly valued since prehistoric times. Egyptian hieroglyphs from 2600 BC describe gold, which the Mesopotamian king Tushratta referred to as being "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 in 700BC.
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 in antiquity was relatively easy to obtain geologically however 75% of all gold ever produced has been extracted since 1910 (see Goldsheet, cumulative gold production). 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.
The primary goal of the alchemists was to produce gold from other substances, such as lead — presumably by the interaction with a mythical substance called the philosopher's stone. Although they never succeeded in this attempt, the alchemists promoted an interest in what can be done with substances, and this laid a foundation for today's chemistry. Their symbol for gold was the circle with a point at its center (☉), which was also the astrological symbol, the Egyptian hieroglyph and the ancient Chinese character for the Sun (now 日).
During the 19th century gold rushes occurred whenever large gold deposits were discovered, including the California, Colorado, Otago, Australia, Witwatersrand, Black Hills, and Klondike gold rushes.
Like other precious metals, gold is measured by troy weight and by grams. When it is alloyed with other metals the term carat (purity) 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 in which one unit of currency was equivalent to a certain amount of gold. As part of this system, governments and central banks attempted to control the price of gold by setting values at which they would exchange it for currency. For a long period the United States government set the price of gold at $20.67 per troy ounce but in 1934 the price of gold was set at $35.00 per troy ounce. By 1961 it was becoming hard to maintain this price, and a pool of US and European banks began to act together to defend the price against market forces.
On March 17, 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 reserve asset although the level has generally been declining. The largest gold depository in the world is the U.S. Federal Reserve Bank.
Since 1968 the price of gold on the open market has ranged widely, with a record high of $850 on 21 January 1980, to a low of $252.90 on 21 June 1999 (London Fixing). Prices have risen to the $420 mark in 2004, part of this rise was associated with a depreciation of the US dollar (an inverse relation between the prices exists to a certain extent).
Because of its use as a reserve store of value, the possession of gold is sometimes restricted or banned. Within the United States, the private possession of gold except as jewelry and coin collecting was banned between 1933 and 1975. President Franklin D. Roosevelt confiscated gold by Executive Order 6102, and President Richard Nixon closed the gold window by which foreign countries could exchange American dollars for gold at a fixed rate.
As a tangible investment gold is sometimes held as part of a portfolio because over the long term gold has an extensive history of maintaining its value. It has in the last century however lost ground to inflation. Thus the only way to make money over the long term on gold investing in normal economic conditions is to trade it, attempting to buy low and sell high. This carries large amounts of risk and transaction costs. However, gold does become particularly desirable in times of extremely weak confidence and during hyperinflation because gold maintains its value even as fiat money becomes worthless. People who despite the risks enjoy investing in gold are known as goldbugs.
Futures contracts based on gold currently trade on the COMEX (Commodity Exchange) which is a subsidiary of the New York Mercantile Exchange. Speculation about the future price of gold and other commodities are carried on here.| Politics | Business | Finance |
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