What was gold first used for

The sharp declines in consumption in and resulted from reduced demands for jewelry the major use of fabricated gold and investment products, which in turn reflected rapid price increases in those years.

Gold nuggets: Small nuggets of gold obtained by panning. Prospectors worked stream sediments to find tiny nuggets that they would sell or trade for supplies. Gold is called a "noble" metal an alchemistic term because it does not oxidize under ordinary conditions. Its chemical symbol Au is derived from the Latin word "aurum. Pure gold is relatively soft--it has about the hardness of a penny.

It is the most malleable and ductile of metals. The specific gravity or density of pure gold is Impure gold, as it commonly occurs in deposits, has a density of 16 to 18, whereas the associated waste rock gangue has a density of about 2. The difference in density enables gold to be concentrated by gravity and permits the separation of gold from clay, silt, sand, and gravel by various agitating and collecting devices such as the gold pan , rocker, and sluicebox.

Nevada gold mine: Fortitude Mine in Nevada produced about 2 million ounces of gold from a lode deposit between and USGS image. Mercury quicksilver has a chemical affinity for gold. When mercury is added to gold-bearing material, the two metals form an amalgam. Mercury is later separated from amalgam by retorting. Extraction of gold and other precious metals from their ores by treatment with mercury is called amalgamation.

Gold dissolves in aqua regia, a mixture of hydrochloric and nitric acids, and in sodium or potassium cyanide. The latter solvent is the basis for the cyanide process that is used to recover gold from low-grade ore.

The firehose blasts the sediment outcrop, washing away sand, clay, gravel and gold particles. The material is then processed to remove the gold. The degree of purity of native gold, bullion bars or ingots of unrefined gold , and refined gold is stated in terms of gold content. For example, a gold nugget containing parts of pure gold and parts of other metals , such as silver and copper , would be considered fine. Thus, karat 14K gold indicates a composition of 14 parts of gold and 10 parts of other metals.

Incidentally, 14K gold is commonly used in jewelry manufacture. The basic unit of weight used in dealing with gold is the troy ounce. One troy ounce is equivalent to 20 troy pennyweights. In the jewelry industry, the common unit of measure is the pennyweight dwt. The term "gold-filled" is used to describe articles of jewelry made of base metal which are covered on one or more surfaces with a layer of gold alloy.

A quality mark may be used to show the quantity and fineness of the gold alloy. In the United States no article having a gold alloy coating of less than karat fineness may have any quality mark affixed. Lower limits are permitted in some countries. No article having a gold alloy portion of less than one-twentieth by weight may be marked "gold-filled," but articles may be marked "rolled gold plate" provided the proportional fraction and fineness designations are also shown.

Electroplated jewelry items carrying at least 7 millionths of an inch 0. Gold sluice: Portable gold sluice. Miners place the sluice in the stream and dump sediments in the upstream side. The current transports the sediments through the sluice and the heavy gold particles become lodged in the sluice. One miner can process a lot more sediment through a sluice than through a gold pan.

Gold is relatively scarce in the earth, but it occurs in many different kinds of rocks and in many different geological environments. Though scarce, gold is concentrated by geologic processes to form commercial deposits of two principal types: lode primary deposits and placer secondary deposits. Lode deposits are the targets for the "hardrock" prospector seeking gold at the site of its deposition from mineralizing solutions. Geologists have proposed various hypotheses to explain the source of solutions from which mineral constituents are precipitated in lode deposits.

One widely accepted hypothesis proposes that many gold deposits, especially those found in igneous and sedimentary rocks , formed from circulating groundwaters driven by heat from bodies of magma molten rock intruded into the Earth's crust within about 2 to 5 miles of the surface. Active geothermal systems, which are exploited in parts of the United States for natural hot water and steam, provide a modern analog for these gold-depositing systems. Most of the water in geothermal systems originates as rainfall, which moves downward through fractures and permeable beds in cooler parts of the crust and is drawn laterally into areas heated by magma, where it is driven upward through fractures.

As the water is heated, it dissolves metals from the surrounding rocks. When the heated waters reach cooler rocks at shallower depths, metallic minerals precipitate to form veins or blanket-like ore bodies. Another hypothesis suggests that gold-bearing solutions may be expelled from magma as it cools, precipitating ore materials as they move into cooler surrounding rocks. This hypothesis is applied particularly to gold deposits located in or near masses of granitic rock, which represent solidified magma.

A third hypothesis is applied mainly to gold-bearing veins in metamorphic rocks that occur in mountain belts at continental margins. In the mountain-building process, sedimentary and volcanic rocks may be deeply buried or thrust under the edge of the continent, where they are subjected to high temperatures and pressures resulting in chemical reactions that change the rocks to new mineral assemblages metamorphism. This hypothesis suggests that water is expelled from the rocks and migrates upwards, precipitating ore materials as pressures and temperatures decrease.

Yet, nations were still unwilling to abandon the gold standard all-together, reinstating it while holding out hope that a renewed era of international gold standard stability would return, but it never really happened. As people began to lose confidence in banks and paper money, gold hoarding became common place and the prices of commodities, especially gold prices , were rising.

Bank rushes and gold hoarding eventually meant that banks had to close. Countries began to raise interest rates in an attempt to entice people to keep deposits intact rather than converting their fiat currency into gold, however this exacerbated problems because it made the cost of doing business much higher.

Eventually this led to many nations finally suspending or abandoning the gold standard all-together in the early s, including Great Britain. Interestingly, many of the countries that left the gold standard earlier, were able to recover from the depression sooner than those that stayed under the gold standard.

At this point the only major nations still under the gold standard with major gold reserves were the US and France. In the US, President Franklin Delano Roosevelt instituted a number of measures in an attempt to prevent the hoarding of gold including making banks turn all their gold holdings in to the Federal Reserve, not allowing them to redeem dollars for gold, and also prohibiting any exporting of gold.

In , the Gold Reserve Act was instituted, which prohibited the private ownership of gold. All gold was given to the government, which is where much of the gold a Fort Knox came from. This allowed the US to pay off its debts with dollars instead of gold. Eventually the US basically cornered the global market for gold. Finally with the outbreak of World War II, the depression had ended, and some countries eventually went back on the gold standard, again.

In an attempt to create a framework for all international currencies backed by gold, the Bretton Woods Agreement was created in By the s, inflation was high and US gold reserves had been heavily reduced to help pay for the rebuilding of Europe and other parts of the world after the destruction of World War II. In , a number of countries that dominated the global supply of gold decided to stop selling gold on the London Market, which allowed the price of gold to be determined by the market.

Although the gold standard seems as though it was largely a failure, there are advantages to the system. The inability for governments to inflate the value of money because it is tied to the supply of gold make it difficult for inflation to increase significantly, while a globally accepted gold standard fixes exchange rates, reducing economic uncertainty.

However, high inflation can occur when war destroys large parts of economies, which was exemplified in the aftermath of World War I. The inability to increase the money supply is often cited as the key issue under the gold standard. Many blamed the gold standard for prolonging the Great Depression, as the money supply was unable to be increased to mitigate the effects of the depression. As mentioned earlier, this led many countries to finally abandon the gold standard all together and never look back.

Some economists also believe that the inability to increase the money supply under the gold standard puts a limit on the amount an economy can grow. The gold standard tends to restrict central banks from taking measures to correct issues within an economy.

Angie Picardo, of NerdWallet, believes that a perfect current example of the perils of the gold standard could be seen during the global financial crisis in the Eurozone, especially Greece. Although the Euro is not pegged to gold, the nature of the fixed Euro exchange rate across the Eurozone made it very difficult for struggling economies to get out of the crisis.

The necessity to maintain a fixed exchange rate with other stronger economies in the Eurozone made it difficult to manipulate the Euro as well as the money supply to combat effects of the crisis.

Roubini argues that the gold standard and other fixed exchange rate regimes also exacerbate shifts in the business cycle. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis.

Some have cited that another disadvantage of the gold standard is that countries with less reserves are at a significant disadvantage to those with more gold reserves. There are still advocates for the gold standard, many coming out during the global financial crisis citing, among other advantages, that the gold standard would create greater price stability than issuing fiat money based solely on confidence.

Austrian Economic Theory is famed for favoring the gold standard. Proponents of Austrian economics believe that manipulating the money supply after the gold standard abandonment is what has actually led to instability in global financial markets over the years. The Fed as it currently operates is clearly a cartelization device that shoves new money into the pockets of rich bankers, and that allows the government to finance massive deficits much more cheaply than would otherwise be possible.

Having presented the advantages and disadvantages above, there is no doubt that the mainstream economic view is that the gold standard is not a feasible way forward.

However, it must be said, as with many things in this world, there are two sides to every coin. If you have made it this far, you will know that gold has a long history of human obsession dating back over years. From the very first time that mankind laid eyes on gold, it has led to an insatiable desire for the metal that has never wavered.

That mutual desire for gold that captivated civilizations all over the world independently of each other facilitated the global adoption of gold as a medium of exchange and later, of course, the gold standard. Since the end of the gold standard the price and production of gold has skyrocketed globally and along with it, so has demand.

The earliest history of human interaction with gold is long lost to us, but its association with the gods, with immortality, and with wealth itself are common to many cultures throughout the world. Early civilizations equated gold with gods and rulers, and gold was sought in their name and dedicated to their glorification. Humans almost intuitively place a high value on gold, equating it with power, beauty, and the cultural elite. And since gold is widely distributed all over the globe, we find this same thinking about gold throughout ancient and modern civilizations everywhere.

Gold, beauty, and power have always gone together. This was a time when gold was highly valued, but had not yet become money itself. Rather, it was owned by the powerful and well-connected, or made into objects of worship, or used to decorate sacred locations. Gold has always had value to humans, even before it was money. This is demonstrated by the extraordinary efforts made to obtain it.

Prospecting for gold was a worldwide effort going back thousands of years, even before the first money in the form of gold coins appeared about B. In the quest for gold by the Phoenicians, Egyptians, Indians, Hittites, Chinese, and others, prisoners of war were sent to work the mines, as were slaves and criminals. Today, as in ancient times, the intrinsic appeal of gold itself has that universal appeal to humans. But how did gold come to be a commodity, a measurable unit of value?

Gold, measured out, became money. Gold gave rise to the concept of money itself: portable, private, and permanent. Gold and silver in standardized coins came to replace barter arrangements, and made trade in the Classic period much easier.

Gold was money in ancient Greece. Gold was associated with water logical, since most of it was found in streams , and it was supposed that gold was a particularly dense combination of water and sunlight.

As far back as B. In ancient Egypt, around the time of Seti I B. Where is that gold mine located? Modern thought is that it portrays the Wadi Fawakhir region in which the El Sid gold mine is located, but the matter is far from settled. Jason and the Argonauts sought the Golden Fleece around B.