Gold, from the fascinating metal of 4,000 BC. Towards the international financial system

Humans have known about gold since thousands of years before Christ. The National Mining Association states that gold was first used as a decorative object in modern Eastern Europe in 4,000 BC. After that, various ornaments were created. including statues of worship from passion Gold first entered the financial sector in 1,500 BC. Gold was used as the first official medium of exchange for international trade. The ancient Egyptian empire benefited greatly from the Nubian gold-bearing region.

At that time, Egypt created the shekel and it became the standard unit of measurement in the Middle East. The shekel is a minted coin made from electrum, a naturally occurring alloy of gold and silver. The weight of each coin is 11.3 grams. Later, around 1,200 BC. Egypt also discovered that gold could be mixed with other metals. To make it stronger and give it a different color.

After about 560 BC. in Lydia, a kingdom in Asia Minor The first pure gold coins were produced. and the period 50 BC.The Romans began issuing gold coins, called aureus.

The important turning point was in the year 1066. William the Conqueror or King William of Normandy It was the first Norman king of England to introduce a new metal coin currency system in England. With this currency system came the pounds, shillings, and pence that are in use today.

After that, various countries Starting to issue gold coins gradually, such as

• Great Britain issues the first gold coin named Florin.
• republic of florence Issued the first gold coin, Ducat, which soon became the most popular gold currency in the world.
• 1787 The United States issues the first gold coin. by a goldsmith named Ephraim Brasher and in 1792 the United States passed the Coin Act. which makes the country have a silver-gold standard which remains in one form

Although it seems that gold coins are starting to gain more attention. And it is more accepted as well. But at the same time, these coins have unstable value and are not durable. Because in the past everyone You can create your own coins. Many coins are not minted by any central authority. Coin making has an irregular shape, is difficult to control, and can be easily counterfeited. Including a method called clipping, it has become another problem that causes the weight of the coin to be less than the actual value of the coin.

These problems have always been solved. For example, in 1696, the British government recalled coins in a big way. Solve the problem by using new coin mining technology. Until it led to the replacement of paper money. Also known as fiat money, which came with the emergence of the gold standard.

The gold standard is a monetary system that is a standard economic unit of account, such as the US dollar, based on a fixed amount of gold. This allows a person holding paper money to walk up to a bank and exchange it for a fixed amount of gold. But then the problem was compounded when paper money began to exceed gold in value. Imbalance in gold and silver production to support paper money Included in this standard is a bimetallic standard based on gold and silver. Later, only one metal was chosen: gold. and a new gold standard was born

In 1871, the international gold standard began to emerge. The measure was officially adopted by England and Germany, and by the 1900s, most developed countries had followed suit. and the golden age of the gold standard was born in 1871-1914 This is because political factors are quite stable.

But after World War I broke out in 1, the gold standard collapsed. Many countries decided to temporarily suspend its use in order to print money to pay for military participation in the war. Huge amounts of money were printed causing hyperinflation.

Changing international cohesion International debt increases The country's finances were in a state of stress, especially in 1929 when the stock market fell heavily. Great Depression People lost confidence in banks and paper money. People returned to hoarding gold. push the price up During that time the bank had to close down. Many countries began to abandon the gold standard entirely.

However, at the time, the only major countries that were still on the gold standard and had significant gold reserves were the United States and France. Franklin Delano Roosevelt, President of the United States in At that time Several measures have been put in place to prevent gold hoarding.

Including forcing banks to Shift all gold holdings to the Federal Reserve. Do not allow dollars to be exchanged for gold. and export was prohibited. In 1934, the Gold Reserve Act was created. This prohibits private ownership of gold. and all the gold was given to the government.

After that, during World War II, the Depression ended. Many countries have returned to the gold standard in an attempt to create a framework for all foreign currencies to be based on gold. As a result, the Bretton Woods agreement was struck in 2. Soon after, the US dollar became the de facto currency. This is because the United States holds most of the world's gold reserves. While central banks of various countries It began pegging its own currency to the US dollar instead of gold.

But during the 1960s, inflation was high. And U.S. gold reserves dropped sharply to help with the recovery of Europe and the rest of the world. of the world after the fall of World War II in 2, many countries that dominated the global gold supply decided to stop selling gold on the London market.

In 1971, then-President of the United States, Richard Nixon Change the price of 1 ounce of gold to $38 and no longer allow the Federal Reserve to exchange dollars for gold. This marked the end of the gold standard, until 1976 the Bretton Woods system collapsed and gold was freely traded on world markets.

refer :

https://www.gold.org/history-gold/gold-as-currency

https://www.focus-economics.com/blog/gold-the-most-precious-of-metals/