Monetary Gold Throughout History

One of the earliest uses of gold as a monetary unit was during the Persian Empire. The Persians collected taxes in gold, in addition to issuing their own gold coin. Later, the Persians would be conquered by Alexander the Great. He used their gold coin as the basis for his own gold coinage. In fact, the Persian kings’ gold hoard was so extensive that when it was released it caused the first known inflation event around the world.

The Republic of Venice created the gold ducat in 1284. This was the country’s first solid gold coin and other European nations followed suit to aid the growing trade between countries. When Spain conquered the Incas and Aztecs, a new source of gold was available. The increased availability of gold allowed the West Indies to select gold as their only legal tender during the 18th century.

When Germany was united after the Franco-Prussian war, the leaders opted to coin the mark (or goldmark) as the country’s currency. Because of the transportable nature of gold, as well as the metal’s stable value, other nations soon followed suit. The gold standard is a monetary system in which the country issuing the currency guarantees that the money or note is backed up by the same amount in gold.

Great Britain was particularly committed to the gold standard. Belgium, France, Greece, Italy and Switzerland only accepted gold coins by 1879. Less than 55 years later, countries such as Great Britain, among others, had abandoned the gold standard.

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Gold was first discovered thousands of years ago in its natural state, in streams, which lead to mining all over the world. Its brilliance, natural beauty, great malleability and resistance to tarnish made it enjoyable to work with. Gold gave rise to the concept of money itself. Today gold is used for jewelry fabrication, industrial application, and medical uses, by governments and central banks and by private investors.