Gold may be the single most consequential material in human history. Gold was almost certainly the first metal humans ever worked, simply because it occurs in pure form in nature with no smelting required. The oldest known gold artifacts date to around 4,600 BC, found in the Varna Necropolis in modern Bulgaria. Those were grave goods that already suggest gold’s association with status, divinity, and the afterlife. Egypt became the ancient world’s great gold power. The pharaohs controlled vast deposits in Nubia (the very word derives from the Egyptian “nub”, meaning gold), and gold became synonymous with the flesh of the gods and the eternal. Tutankhamun’s death mask, at 11 kilograms of solid gold, is the most iconic artifact of that age. The Egyptians also produced the world’s first known map, the Turin Papyrus, circa 1150 BC, which depicts gold mines. That’s a pretty significant tell as to what a big deal gold was in antiquity. Moving to the Ancient Mediterranean, Croesus of Lydia (modern Turkey) was the first ruler to mint standardized pure gold coins, around 550 BC. This was a revolutionary act that made commerce fungible and scalable and sowed the seeds for modern finance and trade. The Persian Empire under Darius adopted and expanded this currency system with the gold daric. Alexander the Great’s conquest of Persia unleashed an enormous flood of accumulated Persian gold into the Mediterranean economy. This maneuver essentially created a liquidity shock (perhaps the first financial “bubble”) that transformed Greek and Macedonian commerce and funded further conquest. So, one can say that gold almost created modern civilization.
Rome built an empire partly on gold extraction. Aurum was the Latin word, giving us “aureate,” “aurora,” and the chemical symbol Au on the Periodic Table of the Elements. Roman gold mines in Spain, particularly Las Medulas, on the Camino de Santiago in northwestern Iberia, were engineering marvels of their day. These entire hillsides in the beautiful Picos de Europa were hydraulically demolished to extract ore. This led to the trade medium of the Medieval World for Islam, Byzantium, and even West Africa. It was the Byzantine “solidus”, a gold coin of extraordinary purity and consistency that anchored Mediterranean trade for over 700 years, from Constantine in the 4th century to the 11th century. Merchants from London to Baghdad accepted it without question. It was the dollar of its day. The Islamic world introduced the “dinar”, which was considered equally reliable. The great secret of medieval gold, however, was based in West Africa, particularly the Mali and Songhai empires. Mansa Musa of Mali, who made his famous pilgrimage to Mecca in 1324 with an entourage of 60,000 people and so much gold that he caused inflation across North Africa and the Middle East for a decade, controlled perhaps half the world’s gold supply. Timbuktu has found its way into the modern vernacular because it was a city of gold and thus a center for wealth, culture and even learning….not something we tend to attribute much to West Africa in this day and age.
During the Age of Exploration, the search for gold was certainly the biggest motive of the efforts. Columbus sailed west partly chasing gold. The Spanish conquest of the Americas was nakedly about gold (and silver). Aztec and Inca civilizations, which equally prized and accumulated gold were looted on a staggering scale by the Spaniards. Between 1500 and 1650, Spain extracted roughly 180 tons of gold from the Americas. The obsession was captured in the myth of El Dorado — a legendary city of gold that drove expeditions from Mexico to deep into South America for over a century, often only finding desert, jungle and death. This gold obsession transformed European economies and caused severe inflation, something we don’t often attribute to those times and think we invented in the 20th Century. In fact, it was this gold-driven “Price Revolution” that destabilized 16th century Europe and could possibly have spurred the French Revolution…which arguably spurred the American Revolution.
Then came the Gold Standard, when gold became money itself. Britain adopted the gold standard in 1821, formally pegging the pound to a fixed quantity of gold. By the late 19th century, most major economies had followed suit and the classical gold standard era (roughly 1870–1914) was a period of remarkable monetary stability and international trade expansion. The system’s fatal flaw was rigidity. Countries couldn’t expand money supply in crises. The gold standard is widely blamed for deepening and prolonging the Great Depression. The countries that abandoned it earliest (Britain in 1931) recovered fastest. FDR took the US off the domestic gold standard in 1933, confiscating private gold holdings by executive order. Americans were legally prohibited from owning gold bullion until 1974. Since then, the world has operated on fiat currency…and still does though crypto is trying awfully hard to change all that.
Gold rushes shaped entire nations. California (the “Golden State”) looks to the Gold Rush of 1848–49 when John Marshall discovered gold at Sutter’s Mill and triggered the greatest mass migration in American history to that point, 300,000 people in two years. San Francisco transformed from a village to a city overnight. California became a state in 1850, barely two years after the discovery. Australia had its own gold rush in 1851, almost simultaneous with California, reshaping the continent’s demographics and economy. South Africa’s gold rush came in 1886 with the Witwatersrand discovery, which triggered the world’s richest gold rush and directly caused the Boer War (1899–1902), as Britain sought control of the Transvaal’s mineral wealth. South Africa dominated global gold production for most of the 20th century. The Klondike in 1896–99 was the last great gold rush, drawing 100,000 people to the Yukon wilderness in conditions of extreme hardship.
Ever since I went into banking in 1976, gold has always been in the background of the investment landscape, mostly as a fall-back hedge against inflation and/or uncertainty. Since Nixon decoupled gold from its $35/ounce mooring, it has risen steadily, spiking to $850 in 1980 during the inflation panic, falling back to $250 by 2001, then rising dramatically through the 2008 financial crisis to $1,900 in 2011. During COVID it broke $2,000 for the first time. Today it trades around $3,200–$3,300/oz, driven by de-dollarization concerns, central bank buying (particularly China, Russia, and emerging markets reducing dollar exposure), and geopolitical uncertainty. Central banks globally hold roughly 35,000 metric tons, the US at Fort Knox and West Point holding about 8,100 tons, the largest national reserve. There are only 212,000 metric tons of gold in existence on earth. That sounds like a lot until you visualize it. It would form a cube roughly 23 meters on each side. That’s about the size of four and a half Olympic swimming pools. Everything ever pulled from the earth across 6,000 years of human effort fits in a modest building…and THAT is supposed to represent the total accumulated value of the world economy ($22.5 trillion in gold when the best estimate of total global wealth is $500 trillion)?
We should be asking ourselves the deeper question of why gold specifically achieved this singular status across virtually every human civilization independently. The answer is a convergence of physical properties: it doesn’t corrode or tarnish, it’s rare but not impossibly so, it’s malleable and beautiful, it’s chemically inert, and it’s easily divisible. Of the 118 elements, only a handful could theoretically serve as money and gold hits every criterion almost perfectly. There’s a saying that goes, “gold is money… everything else is credit”. But now I read that an asteroid called Psyche 16 has been discovered between Mars and Jupiter that has $700 quintillion of gold on it. I think that’s more than four and a half Olympic swimming pools…by a lot. Talk about El Dorado…but then, scarcity kinda goes out the window and inflation looms on the cosmic horizon. I’ve never been a buyer of gold and learning this makes me less inclined…by a lot. I think the world needs a different golden ticket.