Ancient Rome: The Ancient Romans were prolific gold miners, introducing new techniques such as hydraulic mining to the gold extraction process. The vast quantities of gold Rome obtained through these new methods allowed it to strike coins and base its increasingly global monetary system on gold. A treasury of gold coins was maintained, soldiers and mercenaries were paid in gold coins, and the metal also helped bolster Rome's position in international trade. With their constant search for new deposits, the Ancient Romans principally valued gold as something that inhered economic value. In the 1st and 2nd centuries C.E., Roman gold mining operations spread as far as Britain, Egypt, Nubia (Sudan), Annatolia (Turkey), and the Balkans. Unfortunately, some historians point out that the desire for new gold mines contributed to the over-expansion of the Roman Empire.
Timeline of Gold Use
(3000 B.C.E.-476 C.E.) Antiquity
Ancient Egypt: Within Egypt, gold held no economic importance and was not used as money. However, it was frequently sent to vassal kings in the empire's outer reaches as gifts. Beginning in the 3rd millennium B.C.E., for over 1,500 years, the Egyptians consistently mined gold and used it to keep distant vassal kingdoms loyal without resorting to military force. Gold was seen as eternal, and therefore related to divinity, by the Egyptians during antiquity. It was believed that the gods had skin of gold. Thus, gold was used almost exclusively by the pharaohs for royal jewelry and ceremonial paraphernalia, while citizens held virtually none. Monetary gold was not introduced until the Ptolemaic period of Greco-Roman rule.
Ancient China: There was not a great deal of gold to go around in Ancient China. Although it was certainly known of, it was far too scarce to be used as a monetary metal. There are legends of a great disappearance of gold during the Han Dynasty (3rd century C.E.), though some attribute this to a confusion with bronze. The Chinese very quickly developed advanced metallurgy during antiquity, and they pragmatically used the resources most available to them for money and other tools. Both jade and bronze were more highly valued than gold, and both were more abundant. Yet, the Chinese certainly thought of gold as beautiful and understood its purposes; they used it in small amounts to adorn and accent other items with inlaid gold patterns and designs, or to gild a weapon or tool for added strength.
(1492-1789) Age of Exploration
Spain: Gold lay at the heart of the prevailing economic system during the epoch of European exploration, mercantilism, of which Spain was the standard bearer. The Spanish saw gold as the key to power, doggedly searching for the metal in all of their New World activities. They scoured the area that is now the American Southwest in search of “El Dorado,” the fabled City of Gold. Although the Spanish never found El Dorado, they did accumulate gold through their conquest of the native populations—for whom the fascination with gold never made sense. For example, the Aztec word for gold translates to “the excrement of the gods,” while conquistador Hernán Cortés explained to the Aztec chief Montezuma in 1519 that his men were “afflicted with a disease of the heart that can only be cured by gold.”
Portugal: Nearly as active as its Spanish counterparts in extracting natural resources from its New World colonies, Portugal also sought gold bullion as the key to strengthening their nation. This goal was not immediately satisfied by the new colony of Brazil, founded in 1500. However, around 1690, gold was finally discovered. Brazil indeed became one of the world's largest gold producers during the 18th century, enriching the Portuguese monarchy and keeping the government afloat as a strategic ally of the British Empire. Much of the mining activity occurred in the southeast corner of the country in the modern-day province of Minas Gerais (“General Mines”). Portugal was also active in the gold trade in West Africa as it took the lead in shipbuilding and sea navigation during the 15th and 16th centuries.
(1763-1913) Industrial Age
Africa: Around the dawn of the 19th century, the European powers turned their attention to the African continent as a site for colonial expansion. Overshadowed by the destructive institution of slavery is the fact that, for many centuries prior to the discovery of the Americas, West Africa was among the world's largest sources of gold. There was such an abundance of placer deposits of gold in this area that agricultural workers mined fantastic quantities of gold for generations without any industrial technology. The West African nation that is today Ghana was once fittingly referred to as the Gold Coast, becoming a British Crown colony in 1821. Further south on the continent, the wars in South Africa between the British and Dutch at the turn of the 20th century coincided with the discovery of unparalleled deposits of gold in the Witswaterrand region of the country. Over the next century, South Africa would consistently lead the world in gold production.
California & Australian Gold Rushes: Prior to the middle of the 19th century, large-scale gold mining operations were absent from the U.S. and Australia. This is why the discovery of gold in California in 1848-49, and the subsequent gold findings across both Eastern and Western Australia throughout the 19th century, set off frantic “gold rushes” among impromptu prospectors. In many ways, the participants in these rushes viewed gold as progress. It called for innovations in technology and represented a fast ticket to wealth. California, which did not become a state until 1850, was a loosely regulated and largely lawless area, offering earnest travelers an opportunity to freely chase their dreams of self-sufficiency. In 1854, Australian gold miners criticized the fees and taxes associated with the gold rush to voice their displeasure with being taxed by the British without parliamentary representation. Their complaints culminated in the Eureka Stockade, considered by some to be a democratic rebellion.
(1933-present) Modern Era
End of Gold Specie: In 1933, President Franklin D. Roosevelt issued Executive Order 6102, commonly called the “Gold Confiscation Act,” which prescribed removing all gold coins from circulation and raising the official exchange rate of gold from $20.67 to $35.00 per troy ounce.
Bretton Woods: The Bretton Woods system was adopted in 1944 to replace the old “gold standard,” instead pegging other currencies to the gold-convertible U.S. dollar as the global exchange currency.
Krugerrand: Introduced in 1967, the 22-karat South African Gold Krugerrand was the first modern gold bullion coin traded on the free market.
Nixon Shock: In order to protect the dollar as the Bretton Woods system was disintegrating, U.S. President Richard Nixon issued Executive Order 11615 in 1971. Among other safeguards, it called for closing the window on the dollar being convertible to gold, effectively ending any form of a gold standard.
Bullion Ban Lifted (U.S.): Under President Gerald Ford, the U.S. government formally ended the prohibition on physical gold ownership by private American citizens on New Years Eve, 1974.
American Gold Eagle: Pursuant to the Gold Bullion Coin Act of 1985, the United States Mint began issuing its new investment coin containing 1 troy ounce of gold weight, the American Gold Eagle, in 1986.
Creation of gold ETFs: The first exchange-traded fund (ETF) for gold is launched in 2003, beginning a period of investor interest in non-physical gold derivatives and other financial products tethered to gold.