Why is Gold Valuable? A Historical Overview
Gold is undoubtedly “valuable”. But how “treasured” is the rare metal? Most people think gold is inherently precious because it shimmers or looks splendid — which is true, but that doesn’t give the complete picture. Gold’s chemical properties and the resulting physical applications contribute majorly to the metal’s coveted status across the globe.
Gold can withstand different environments. And because gold has no expiry date, it continues to be functional like it was on day one. That’s a trait very few precious metals or any chemical element on the periodic table could claim to possess. Not to mention, gold mixes well with most other metals — such as copper, silver, platinum, etc.
We can continue to sing praises of gold’s properties or its ability to add value to everything it partakes in. But that’s not the purpose of this piece. The goal here is to introduce you to the metal, its history, etc., so that you can appreciate the metal without any prodding from our side.
In this article, you’ll get to know the:
- History of gold (human history with gold, discovery stories, etc.)
- Diverse applications of gold
- Answers to a few common questions, and more.
Keep reading if you’re curious how gold works or why gold is valued more than other elements, even more than other noble metals (silver and copper).
Table of Contents
History of Gold: A Brief Overview
Though gold isn’t the rarest precious metal, it’s arguably the most valuable. And there have been numerous instances of coins made with gold being sold for more than list prices or their melt values. There’s, therefore, no doubting the value and legitimacy of gold.
However, like the actual birth date of Christ is subject to debate, it’s not clear when humans first discovered gold. Paleolithic caves from 40,000 B.C. have gold flakes in them. There are also stories of people first finding the metal in rivers and streams in various parts of the world.
Documented Gold Discoveries (in Chronological Order)
Gold has been found the world over. The following are some of the recorded instances:
In 1700 AD, Brazil found gold on its shores for the first time. By 1720, the country became the largest gold producer, accounting for two-thirds of the global output.
The United States
In 1799, gold was found in America for the first time (first to be documented). It was accidentally discovered by a 12-year-old boy in North Carolina’s Cabarrus County. The piece of gold was a 17-pound (7.7kg) nugget, which the boy took to his father. Not knowing it was gold, the boy’s father used the chunk as a door stopper for a few years.
Later, in 1802, the man took the gold to a local jeweler and got it evaluated. The jeweler knew it was gold and bought the mass for a paltry $3.50. Soon, word spread, and people thronged to the region, hoping to find gold nuggets of their own.
The phenomena ushered in America’s first gold rush (frantic search for unfound gold) — the Carolina Gold Rush in 1802. In 1803, gold was found at Little Meadow Creek (also in North Carolina). With time, reports of gold being discovered in different parts of the country came up, causing subsequent gold rushes — the Georgia Gold Rush and the California Gold Rush.
In 1851, Australia found its first native gold courtesy of Edward Hargraves, a gold prospector. He found the gold in New South Wales’ Bathurst in a waterhole. Later, more gold discoveries took place in the country.
A gold discovery was first recorded in South Africa in June 1886, in Witwatersrand. The finding was a defining moment as the country went on to become one of the largest gold producers in the world. Before that, South Africa was primarily an agricultural nation. Even diamonds didn’t play as significant a role in boosting South Africa’s economy as gold did.
Initial Use Cases
The National Mining Association states gold was first used in 4000 BC in Eastern Europe to make ornate items. It’s believed gold was employed solely for making jewelry, idols, etc., during the period.
Later, during 1500 BC, the ancient Egyptian empire made gold the official medium of exchange or intermediary instrument for global trade. The currency coins that Egypt made with gold was an alloy constituting one-third silver. The coins were irregularly shaped or unlike the coins produced by mints as regular people hammered them down.
Ancient Egyptians (both the elite and ordinary people) had plenty of gold to work with or put the metal to varied uses. With gold, artisans made vessels, ornamental weapons, funeral art, death masks, amulets, etc. Gold was used to create objects for functionality, aesthetics, and even harbingers of good luck. Gold was an integral part of Egyptian culture. Even Djer’s tomb has gold jewelry.
The Egyptians are also credited with discovering that gold could be mixed with other metals for increased durability. The fire assay, a method that helps detect the purity of gold, was also found around the same period — approximately 1350 B.C. The Babylonians, not the Egyptians, discovered the technique, however.
In 2500 BC, Chinese doctors used gold to treat skin ulcers, smallpox, furuncles, and eliminate mercury from flesh and skin.
Read more: What is Gold Purity
Ancient Gold Coins and Associated Events
In 1500 BC, 11.3 grams (0.40 ounces) of gold was used to make the “shekel”, arguably the oldest or first known currency form. The gold coin became a unit of measure across the Middle East. The coin was not pure gold but electrum – a naturally occurring alloy – roughly one-third silver blended with two-thirds gold.
- In 1091 BC, China legalized little gold squares as money.
- Lydia, an Asia Minor kingdom, minted the first pure gold coins in 560 BC.
- In 50 BC, Romans started to issue the Aureus gold coin — the Roman world and ancient Rome’s basic monetary unit.
- In 1252 AD, Great Britain comes up with the “gold florin”. The florin was its first massive gold coin, made from 24K gold and weighing a hefty 3,536 grams (7.8 pounds). The other gold coins – the noble, angel, guinea, and crown – followed suit decades later.
- In 1284, Venice came up with the ducat, which is among the most popular gold coins ever minted. It was used for trade purposes between the 13th and 20th centuries.
- In 1787, Ephraim Brasher made the first U.S. gold coin — the 1787 Brasher Doubloon. The gold used was not “American” since gold was first found on American shores 12 years later in 1799.
In the decades that followed, other countries started minting their gold coins (both circulatory and non-circulatory).
Explained: Gold and Its Charm
Now that you know a bit of the history behind gold, let’s go through the facets that deem gold highly valuable.
Found Globally, Yet Rare
Johannesburg is considered the gold capital of the world. But contrary to common notions, gold is found across the globe. There is no continent without gold mining operations. Antarctica is the only region where gold hasn’t been found yet. That’s because humans haven’t set up mining operations citing the continent’s harsh weather.
In America, gold is mined in pretty much all states. Some of the significant gold-producing states are Nevada, California, Alaska, Colorado, and Arizona. Out of the top 10 gold mines in the world, three are in Nevada.
Despite the worldwide availability, gold is relatively rare because finding new gold is exceptionally arduous. Gold mining companies can vouch for how capital-, time-, and effort-intensive the new gold discovery process is.
Aesthetics and Structural Integrity
When gold was first discovered, humans were besotted. They did not know what the precious metal was, how it worked, its potential applications, malleability, etc. Yet, they were fascinated. It was limerence. Over a period, as people got familiar with gold, the love affair developed and continues to date.
Besides looking great, gold is also solid and non-perishable. It doesn’t oxidize or tarnish, or doesn’t rust upon exposure to air. Most of the gold in use currently are likely discovered several hundred years ago, if not thousands of years before.
Gold supports electricity conduction or allows electricity to pass through it. It’s incredibly malleable — which means you can pound and shape the metal multiple times without fearing breakage.
A chunk of gold can be hammered and flattened thin enough to allow light to pass through it. Thin sheets of gold, or gold leaves, have been used to adorn several important buildings across the globe, such as the Golden Temple (India), St. Michael’s Cathedral (Ukraine), Dome of the Rock (Jerusalem), etc.
Gold leaves are also used on the insides of structures, providing a corrosion-resistant and durable covering to internal surfaces.
The following are the other two industries in which gold is commonly put to work:
Gold salts, or gold compounds, are used in the treatment of rheumatoid arthritis. Gold is also used to treat joint stiffness and pain. It could help decrease bone damage and swelling and reduce the possibilities of joint disability and deformity or prevent their formation (not curing existing conditions).
Because gold is non-corrosive, surgeons usually do not think twice before inserting medical devices plated with gold in the human body. There is no post-operative infection risk after the insertion. The inherent luminosity of gold, which helps detect the implant during medical imaging procedures, is another reason the metal is so prevalent in medical applications.
Gold plating is commonly found on medical implants, such as stents and electronic pacemakers—military medical personnel use gold-plated laser equipment to treat injuries on the battlefield.
The malleable, non-toxic, and ductile property of the metal has had multiple applications in dentistry too. Dentists use the metal for a range of dental procedures, such as in the treatment of cavities, tooth restoration. It’s used to make crowns, bridges, fillings, and several other orthodontic appliances.
Tech and Electronics
Gold’s excellent electrical conductivity makes the metal an ideal electronic/electrical component or part, such as a connector or contact pin. Because gold has very high corrosion resistance, it facilitates accurate and rapid data transmission from a device to another.
A tiny quantity of gold could be found in almost every gadget, such as calculators, phones, computers, etc. There are approximately 10 troy ounces (311 grams) of gold in a ton of smartphones (roughly around 10,000 phones). Two hundred laptops and a ton of PC circuit boards consist of five troy ounces (155.5 grams) of gold individually.
Read more: Karat vs Carat
Gold has intrinsic value, external applications, and an aesthetic appeal, unlike any other thing.
Pretty much no other metal on the planet could boast of such attributes. Even if they do, they may not be on par with gold on the value front and/or the varied usage department. Silver, for instance, accomplishes quite a few things gold does but is not as “valuable”. On the other hand, copper is resilient and plays a part in different functions, but it’s nowhere as rare or precious as the quintessential yellow metal.
Therefore, we strictly recommend buying gold or investing in the metal. Have some gold holdings of some form, for the metal is never going out of demand. Acquiring physical gold such as gold coins or bars, buying gold through the stock market (gold stocks, gold ETFs), etc., are different ways to own gold.Gold IRA is another veritable way to invest in gold. The IRA lets you own physical gold and eliminates the headaches (security and safety concerns, particularly) associated with owning gold in the metal. Click here to learn more on the more safer, IRS-approved way to invest in physical gold.
What are the other fields gold is used in?
Besides the above, gold is commonly employed in aerospace, glassmaking, etc.
Gold gets used in the circuitry of space vehicles. Moreover, several parts of the vehicle have gold-coated polyester film fitted. The cover reflects infrared radiation, besides stabilizing the spacecraft’s temperature. Even the visors on the astronaut helmet have a thin gold film, which protects the astronaut’s skin and eyes from solar radiation.
Gold helps make specialty glasses for buildings designed to reflect solar radiation, helping the structures remain cool during summers. During winter, the internal heat reflection helps things stay warm inside.
Is all mined gold “pure”?
Pretty much all mined gold is in its pure form or is nearly pristine. Calaverite and sylvanite are the minerals usually bearing gold. Due to their yellowish appearance, however, they could be mistaken for gold.
Why is gold so valuable despite not being the rarest precious metal?
Platinum is rarer than gold. You could fit the world’s platinum production inside an average living room. What breaks it for the metal, however, is its generic appearance. For instance, it’s not easy to discern between a platinum ring and a white gold ring. You’ll have to take them to a jeweler to ascertain which is which.
Gold has no such identification crisis. Even though other metals have a yellowish hue, such as copper, the yellow of gold is unique enough to stand out from the other shades of the color. Gold’s hue is one of the multiple reasons gold holds its own.