What is the Deep Impact of Gold

Few naturally occurring substances have had nearly universal value among ancient and modern societies as gold. We often think of gold as something decorative or worn. However, in the ancient and modern worlds, gold was also the standard in which economies and value of other objects were measured by. In effect, gold helped structure and continues to help structure economies around the world today.

How Gold Became Important for Economies

Gold has been found in a variety of ancient societies in the New and Old Worlds. In almost all these contexts, gold was often buried with high status individual, indicating its value to ancient elites and leaders. This was true for prehistoric as well as historic societies. While gold was valued as a high status object, as societies began to form established governments and kingship, starting in Egypt and Mesopotamia, gold began to take an important value for trade. Initially, the trade was because of demand by elites. However, the value of gold also was in the fact it was not a perishable material. It was one of the few substances that was nearly universally valued, was easily transportable, and was not perishable. Societies in Mesopotamia and Egypt began to see its worth as a safeguard against fluctuations of other important commodities, with grain being the most important one. Silver also played a similar role in societies, where silver was often combined with gold to create electrum.

Another aspect of gold was that it began to be seen as a substance given by the gods, as its purity and shiny luster made it seen as a divine substance. By the 3rd millennium BCE, most likely spanning the Near East and the Indus, gold was used to make statues of gods. One aspect affecting gold was the fact that it was not evenly dispersed. Regions south of the 1st and 2nd cataract in the Nile soon became among the most important sources of gold that Egypt heavily exploited in the 3rd millennium BCE. The security that gold offered as well as its association with the gods increasingly made many objects, including luxury goods such as other precious stones or metals, valued relative to gold.

In early Chinese dynasties, gold probably did not play as important a substance as jade. However, it was still used to decorate objects and often was intermixed with other precious materials. However, as gold became a key medium of exchange or value of exchange, gold in China also gained increasing value in the 1st millennium BCE, where it was locally valued and important for trade.

Later Developments

While gold gained increased importance in places, particularly as international trade developed more formally in the 3rd and 2nd millennium BCE across the Mediterranean and Central Asia, from there the worth of gold did stall for a period. The next period of expansion likely occurred when coinage was developed. Sometime by the early 6th century BCE, silver and gold were now used to create coins. As coins were intended to symbolize value, it was important now that gold had to be pure. In fact, electrum, which combined silver and gold, was outlawed in Lydia, which has been considered the first state to use coinage. The use of coinage was initially in international trade. As empires developed across the Mediterranean in the mid to late 1st millennium BCE, that now connected the Mediterranean basin with Central Asia and India, coinage became more important for trade. The rise of the Achaemenid and particularly Greek-based empires in Bactria and Seleucia helped spread coinage to many regions. Gold now became the key material that was used for the most valued exchanges across much of the Old World. Expanding Greek colonies in Europe, increased trade across Central Asia, which became the Silk Road, and seaborne trade via India and the Arabian Sea became some of the most important trade routes in the Roman and late Classical period.