Gold as a money commodity: evolution and modern times - Golden Way Group

Gold as a money commodity: evolution and modern times

Gold has long been considered the measure of wealth. Proverbs and songs are dedicated to it. People are proud of it and strive to increase it. How did the worldwide obsession with gold begin as a measure of value of everything around? Let’s figure it out.

Gold as a money commodity: evolution and modern times

From the very beginning of gold mining (and this is the time of the Ancient Kingdom in Ancient Egypt, which existed several thousand years ago), gold was compared to a deity. It was associated with the embodiment of the sun on earth. Accordingly, the primary owner of such a valuable metal was a representative of the divine will on earth – a pharaoh. However, other high and mighties did not lag behind. It was then that gold became a measure of power and wealth.

As a result, a large amount of gold (a gold reserve) became a casual concept: every empire or state that pretended to such status was aiming to acquire a gold reserve. Alexander the Great was a good example of that. During his acts of invasion, he accumulated in his hands the maximum of gold reserves of the Old World. At that time, gold existed in its most diverse forms:

  • Bullions and nuggets of gold were one of the oldest values. One could easily exchange them for goods or services or turn them into coins.
  • Coins appeared already in the 7th century BC on the territory of Anatolia (modern Turkey), which was under the rule of Ancient Greece.
  • Jewelry and utensils made of gold, despite their utilitarian nature, were also widely used and could be exchanged as it is or replace the money. Moreover, such state of affairs persists even these days: take, for example, the exchange of jewelry in pawnshops.

To this day, people collect gold coins and bars because gold was and remains the measure of value of everything.

Gold as a money commodity: evolution and modern times

When gold was pushed off the pedestal

You might ask yourself: how come gold coins are not in use today? The answer lies in the development of European society. The first impact on gold was made by the conquistadors of Columbus, who opened the riches of the New World to old Europe. At that moment, Spain became so rich that gold simply lost its value, as in the case with the devaluation of modern currencies.

But later, gold has improved its position: up to the beginning of the twentieth century, gold coins were in use in many countries. Only in the 50s of the twentieth century, they gave way to paper currency, but at the same time became the subject of accumulation for collectors and hoarders – that is, those who prefer to hold wealth in the form of gold coins.

Another story happened with gold bars that are among the most desirable ways to accumulate capital in modern society. While oil, cryptocurrencies, and conventional currencies can be subject to severe fluctuations in the exchange rate, the value of gold remains stable. Gold bars are stored in the national banks of each country as a gold reserve – a guaranteed fund to replenish reserves. By the way, the last country that refused to secure its money with gold was the United States.

Today gold retains its reputation as a universal measure of value. It is not used in commodity-money exchange, but possession and accumulation of gold remain among the main priorities. To do this, it is not at all necessary to become a hoarder. It is much more convenient to own gold in the form of bars and store it in a bank.

Gold as a money commodity: evolution and modern times

Moreover, you can buy gold both from banks or directly from producers such as Golden Way. By doing this, you can secure a stable future for yourself and follow the traditional path of our ancestors, for whom gold was the highest material value.

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