When someone sees a gold coin or a piece of fine jewelry, a common reaction is to think about how much it’s worth. The fact that gold has been considered valuable since the dawn of civilization may not come as a surprise to any of our readers, but the precious metal’s history as a formal currency may. That’s why we’re happy to provide this brief introduction to gold’s use as a unit of monetary exchange over time.
Gold Coins and Antiquity
Archaeological findings suggest that gold may have been used in commerce as long as 5,000 years ago, but the oldest gold coins uncovered have been dated to 550 B.C. It is generally believed that the minting of the coins was commissioned by Croesus, King of Lydia. Gold coins from throughout Central Asia and as far east as China dated to the centuries following have also been uncovered.
The Gold Standard
Fast-forward 2,000 years and gold was still the standard by which nearly all currencies were measured. By the 1870s, most countries operated on what we refer to as the “gold standard.” Gold coins were an acceptable form of currency in most countries, and differences in the balance of payments among countries were settled in gold.
The gold standard eventually ran into some problems. In hindsight, we can recognize that this was probably due to a lack of clarity and regulation to the rules that regulated the standard. Understanding that something needed to be done to strengthen the international financial system, a conference was held in Bretton Woods, New Hampshire. It was there that the U.S. dollar was fixed to gold and all other currencies fixed to the dollar, creating a “dollar standard.”
If history has taught us anything, it’s that gold will always be valuable. While gold’s worth ebbs and flows over time, gold has retained its status as a store of monetary value for millennia. If you live in the Gaithersburg area and are looking to buy or sell gold coins, jewelry, or gold in any other form, visit Coins of the Realm. To speak with a reputable gold dealer about the services we provide, call (301) 340-1640.