​Gold: A Trip Down Memory Lane

Persian Daric gold coin: one of the purest ancient gold coins at nearly 96% purity.

For more than 6000 years, gold has held its place at the head of the economics value chain. This unswerving longevity has produced a confidence that this situation isn't likely to change anytime soon. Historically gold has underpinned governments, currencies, and entire economies. It still does – gold is the only metal central banks and governments have retained in bulk quantities.

The Thing About Gold

It's likely the first gold discoveries were in the form of gold nuggets and such, perhaps found washed up in creeks and streams. Its shiny malleable non-corrosive brilliance was an instant hit and so our association with this, one of the most precious of metals, began.

We know humans have valued and collected gold since at least 4600 BC. A vast wealth of gold trinkets and various other items dating back to 4600 – 4200 BC have been found at Varna Necropolis, an ancient burial site in Bulgaria. The sheer breadth and quality of the gold artefacts found at this site is breathtaking. There are over 3000 gold items, representing 6 kilos of pure gold. One grave alone, believed to be that of a king or some other ruler, contains more gold than all other known sites from this period combined! 

Significantly, the site predates even those in neighbouring Turkey, which were previously thought to be the oldest civilisations, and hence producers of the oldest items of gold, in existence. Further, the gold found at Varna Necropolis indicates that even back then it was an expensive luxury, associated with immortality, wealth, and privilege, and often buried with high ranking people to serve as a status symbol in the after world. Indeed, 75% of the gold at Varna Necropolis was found in just 4 of the graves!

Similar ancient gold items have been found in other parts of the world, indicating that wherever gold was used it obviously held similar cultural and hierarchical values across all these societies. This type of 'instinctive' universal value for a particular commodity, regardless of culture or location, was quite rare for the time given that there would have been little or no contact between these societies. Small wonder then that gold went on become a commodity that underpinned the global economy. 

The Beginnings of Gold Trading By The Masses

Gold and its associated wealth remained invested in jewellery, iconology, burial adornments, and the like for many centuries but there is considerable evidence that by 3000 BC it was also becoming a valuable trade commodity in its own right. Texts written around this time further indicate that although much of this trade was state-controlled, it wasn't exclusively so. 

Gold ownership and gold trading had in fact expanded beyond the previously almost exclusive prerogative of royalty, government, and the upper echelons of ancient society. Now private households were likewise seeking to acquire and own gold, although it's rare to find these owners buried with their gold. Rather, in these more 'commercially minded' households it seems gold was considered far more valuable to the living than the dead. It was a way to obtain, preserve, and pass on family wealth to FUTURE generations.

Gold Gets A 'Measurable' Unit 

Gold was also becoming a commodity with a 'measurable' value. Notably, the code of Menes, written around 3100 BC, declared that "one part of gold is equal to two and one half parts of silver in value." Menes was the founder of the 1st Egyptian dynasty and his code is the first evidence we know of that formally assigns a value ratio between gold and silver. By now it's also clear that gold was being sourced from further afield ie India and Anatolia, to feed the growing trade demand in and around more densely populated areas like Egypt and Mesopotamia. 

Gold trading expanded even more rapidly during the 2nd millennium, spreading across the region and throughout the eastern Mediterranean. It's also during this period, and notably during the Late Bronze Age, that we see gold increasingly used as a 'value standard' for measuring the value of many other commodities.

Gold And The Late Bronze Age

The period between 1600 and 1200 BC, a time frame that corresponds with the Late Bronze Age, was one of intense trading across the ancient world. By this time, not only did we have a value ratio for gold and silver but we'd also well and truly developed a 'primary value standard' for measuring the value of a wide range of tradeable commodities. 

During the early Bronze Ages, this standard was usually silver due to its wider availability. In the Late Bronze Age however gold took over as the popular value standard for trade objects of high value, and also for measuring the value of other metals. This paved the way for the next stage of its progress towards becoming the most valuable and sought after trading commodity of all, namely its use in coins! 

The Appearance of Gold In Coins

The Lydian Lion
It's generally accepted that the oldest coinage known is the Lydian Lion but when exactly the first of these coins were made is unclear. According to some sources, they were the brainchild of merchants in Lydia at the turn of the 7th century (700) BC. Other accounts put the date in the late 600's BC during the reign of King Alyattes (610 – 550 BC). Lydian Lion coins were made from electrum, a gold and silver alloy that contained at least 20% silver, giving the coins a silver rather than gold appearance. They were rudimentary, being little more than flattened chunks of electrum stamped with the royal lion.

Those royal lion stamps though are hugely significant. It was a clear indication that gold's use as an important trading and exchange mechanism now had formal government support. Even more significantly, the stamping gave credence to the concept that gold and coins generally were now regarded as 'state property'. Furthermore, given that gold was still, even at this time, associated with wealth and the higher echelons of society, it's likely gold coins were originally intended for high value transactions. 

The Chinese Ying Yang
Over on the eastern side of the massive Asian landmass, the Chinese were also creating gold coins. Their Ying Yuan is the 3rd oldest coinage we know about and was made from squares of pure gold stamped with the coin's monetary weight or unit. The Ying Yuan coins were produced between 600 and 500 BC.

The Persian Daric
In Persia, Darius the 1st (520 – 480 BC) overhauled the currency system introduced around 546 BC by Cyrus the Great. The old coins were replaced with a standardised coin called the Persian Daric. This was a high quality, chunky gold coin of almost 96% purity and weighing 8.4 grams. It was also Darius I who decreed that a gold daric was equal in value to 13 ½ silver coins. The daric became the monetary standard for the rest of the First Persian Empire (550 - 330 BC). Unfortunately for posterity, most Persian darics were melted down to make the gold staters of Alexander the Great after he conquered Persia in 330 BC.

The Spread Of Currency For Trading

Coin usage generally continued to gain ground as a trading system throughout the last centuries BC, with total control over the minting process falling under the jurisdiction of government authorities. The use of, and amount, of gold in coins likewise became more standardised as time wore on. Other metals like silver and copper were also increasingly used to produce coinage but gold coins were invariably given the top denominations, and remained the most valuable. 

Gold currency maintained its popularity through the Medieval Period and beyond. The hunt for new gold deposits contributed significantly to events like the Spanish Conquests of the Americas. Much of the gold they brought back from their expeditions was turned into currency for use by the Spanish government and the country's banking system. This deliberate accumulation of gold and thus wealth by European states like Spain consequently helped set the stage for the ensuing power struggles that came to dominate the continent's history. 

Today gold coins in most currencies are specialist collectors items, minted purely for their beauty and investment value. In fact, 6600 years on from the Varna civilisation, nothing much about gold as a symbol of wealth and prosperity has changed.
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Wednesday, 25 November 2020
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