The History of Gold As Money

Posted - August 23, 2023
The History of Gold As Money

The When and Where of Gold’s First Play as Money

Gold was not always thought of as currency. It is believed that gold was initially mined from streams and rivers and appreciated for its shine and beauty and, well, that’s about it. According to the National Mining Association, gold was first mined around 4,000 years ago and mostly used as a decorative metal in the crafting of unique objects.  

Somewhere around 1500 B.C., Egypt began to trade gold and created the Shekel as a result. However, the Shekel was not a pure gold coin. It was also minted with silver and used as currency for international trade. 

History records that the first minting of pure gold coins was issued by order of King Croesus in or around 560 B.C. By then, countries all over the world had realized the value of this precious metal and were also using it as currency in their own budding and independent markets. However, as there was no real standard or regulation and people were literally able to craft their own individual coins for trade, you can easily imagine how quickly and easily that system was corrupted. 

Gold as Money Gets Real

In 1284, Great Britain issued its first major gold coin, the Florin. By 1387, that country shifted to a monetary system that was based entirely on gold and silver. To be sure the Brits were committed and gold as money found its footing. 

In 1700, Isaac Newton, master of the Royal Mint, fixed the price of gold. He assigned an official value to a coin, being 84 shillings. Not long thereafter, a U.S. gold coin was first minted in 1787. One hundred years later, the United States adopted its unofficial gold standard. 

These are just a few of the milestones that helped establish gold as money leading up to the 20th century. 

The Not So Gold Standard

The gold standard did not fare well in the 20th century. This is because the standard does not hold up well in times of inflation, recession or depression. Its first test came about with the Great Depression. The United States stepped away from the domestic gold standard in 1933 and finally ended international convertibility of the dollar to gold in 1971. 

Today, it is realized that gold is so much more than money. Because gold is remarkably conductive and durable, it plays a central role in supporting our booming technological revolution. We would be remiss not to suggest that gold makes for a strong investment opportunity. 

If you’re looking to upgrade your portfolio with more gold or if you’re interested in your first purchase of gold coins or bullion, Hero Bullion can help. Your free consultation is just a click away. 

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Hero Bullion provides an environment that is informative and safe for those looking to own physical gold and silver bullion as an investment. We love helping folks at all stages throughout their bullion journey making progress towards acheiving their financial goals. Whether you are a seasoned bullion investor or brand new to the game of gold and silver bullion ownership, we're here to help and serve you in any way we can.