Precious metals have long been a safe haven asset — for about as long as civilization has been around. Their rarity, beauty, and durability have made them a favorite store of wealth for everyone from the Ancient Mesopotamians to today’s modern investors. Here’s a look at how precious metals have been used throughout history.
Discovery and Early Uses of Gold
Gold has long been the most prized precious metal, and it likely was the first one widely used. Archeological digs have found gold in Eastern European civilizations from around 4,000 BC, and the Ancient Egyptians were also using it by 3,600 BC (if not before).
No large ancient precious metals mines have ever been discovered, so gold was most likely sourced from streams and rivers. It’s easy to see people who needed to get water from rivers every day would discover and collect shiny flakes of gold from the sediment.
This would mean that gold was sourced in small flakes, and possibly the occasional nugget, and then smelted. Archeologists have found definitive evidence of the Egyptians smelting gold by 3,600 BC, and Eastern Europeans presumably did too.
Jewelry and Idols
At this point, the primary uses for gold were in jewelry and idols. Everything from necklaces and rings, to statues of gods and goddesses were adorned with gold.
The beauty and scarcity of gold make it an obvious choice for these uses. It’s also a fairly malleable metal, which would’ve allowed crafters to create patterns, faces, and other fine etchings in gold.
Coinage
Interestingly, gold coins aren’t really present at the earliest archaeological sites where gold has been found. The use of gold evidently predated the use of traditional money.
The first known use of coins comes from Ancient Egypt in 1,500 BC. They created the shekel, which was made of a gold-silver alloy called electrum. The first pure gold coin comes from Lydia (modern-day Turkey) around 650-600 BC.
After ~600 BC, coins start to become more widespread because of trade throughout Europe, Africa and Asia. Some of these coins were made from gold, but other precious and semi-precious metals were used too.
Precious Metals in Ancient Civilizations
Ancient Egypt has some of the earliest and most widespread use of gold. This might be partly because it’s a widely studied ancient civilization, but it’s also one that was perfectly situated for gold.
Not only was Egypt one of the largest and wealthiest empires of the ancient world, but it was largely situated along the Nile River. The Nile is the longest river in the world, and it regularly floods each year. That made it great for growing crops — and may have left a fresh layer of sediment with gold flakes after each flood season.
Gold was used for jewelry that the wealthy had, and also for idols that were worshiped. Because pharaohs were both rich and gold-like, it’s not surprising to find gold in their tombs.
The size of Egypt’s empire likely also created the need for a currency, the shekel, later in Ancient Egypt.
Mesopotamia is the oldest recorded civilization, predating Egypt by several millennia. It was located where modern-day Syria, Kuwait, and Iraq are, and did last for several thousand years.
Precious metals weren’t used in Mesopotamia as much as they were in the other civilizations that followed (like Egypt). Instead, Mesopotamians mostly used semi-precious metals that they could source. That’s copper and arsenic.
It’s not so much copper and arsenic on their own that are most important, but rather the alloys that they could create. By ~4,000-3,000 BC, Mesopotamians were using these to create bronze alloys. Copper was malleable, strong, and widely sourced. Arsenic has a low melting point, which was useful when making alloys and working with the alloy bronzes.
Mesopotamia’s bronze alloys gave rise to the Bronze Age, which occurred as the civilization was waning. Bronze alloys replaced stone as the preferred material for tools and weapons. The advancement changed Mesopotamia, Egypt, and the rest of the Ancient World in Europe, Africa and Asia.
With Greece and Rome, the use of precious metal coins spread as the empires spread. Metals continued to be used for jewelry, idols, tools and weapons, but coins were needed for commerce within the civilizations.
During the Greek and Roman periods, coins made of gold, silver, bronze and sometimes other metals were common. Many of these (and other) ancient coins are collected today.
The Aztecs and Mayans certainly had precious metals available, and knew how to make jewelry, idols, tools and weapons from them. Metallurgy didn’t catch on in the Americas as it did in Europe, Africa and Asia, though.
Stonework remained the preferred way of making tools and weapons, and most commerce didn’t require coins.
Economic Value and Monetary Systems
As civilizations became more established and settled, they grew and so did commerce. Coinage began in Ancient Egypt, one of the largest civilizations, and was used by the ones that followed Egypt.
Greece and Rome wouldn’t have been the economic powerhouses that they were without coins; the Silk Road also wouldn’t have functioned well without coins that were recognized by different areas.
In order to have economic value, the coins had to be made of precious or semi-precious metals. Although there was often a ruler’s face on the front of a coin, it was the metal — and not the ruler — that primarily gave ancient coins their value.
There are even marks on many Ancient Greece and Roman coins that verify the components of the coin:
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- Countermarks were made by an official authority, and used to certify the metal content, authorize circulation within a region, or assess a value.
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- Bankers marks were made by private individuals, in order to verify that the coin’s center was indeed the same metal on its exterior. No one wanted a silver- or gold-plated counterfeit coin.
Precious metal coins continued to be the favored currency for millennia, with almost every country using them. Coins today might be less frequently used for commerce, but gold, silver, and other precious metals continue to be a favored store of wealth — in both coin and bar form.
Thankfully, official stamps certify the contents of gold and silver coins. There’s little need to mar a beautiful gold coin in order to verify that it’s truly made of gold. Most are certified 99.999% gold or another metal.
Cultural and Artistic Significance
Precious metals have always been used in art and culture, even before they were in tools, weapons or coins. The earliest Eastern European civilizations had jewelry and idols made from gold, and pharaohs were adorned during both life and death. Mesopotamia was one exception, but they used primarily semi-precious copper (and arsenic) rather than gold or silver.
Of course, the use of gold, silver and other precious metals has continued throughout history. These metals have continually been used in jewelry, crowns and palace rooms.
The “silver screen” is a movie theater term that references how beautiful silver still is. Its use has even become metaphorical, while simultaneously remaining very literally used in rings, watches, and other jewelry.
Geographical Discoveries and Major Gold Rushes
The California Gold Rush of 1848 is, by far, the most famous gold rush in North America. It’s among the most famous in the world. This is far from the only gold rush, however. Some of the most notable include:
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- North America: The California Gold Rush was followed by the Klondike Gold Rush (Yukon, Canada in 1896-1899) and the Nome Gold Rush (Nome, Alaska in 1899-1909). The order of these is generally reflective of what order what’s now the Western U.S. and Western Canada were settled in.
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- Australia and New Zealand: Australia had the Victoria Gold Rush (Victoria, Australia in 1851-1869) and Western Australia Gold Rushes (Western Australia in 1885-1893). There was the Otago Gold Rush (1861-1864) in New Zealand.
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- South America: Immense amounts of silver were discovered in Mexico during the late 1400s, which further incentivized the colonization of Central America. There’s also been the Brazilian Gold Rush (Minas Gerais, Brazil in 1690s-Late 1800s) and the Terra del Fuego Gold Rush (Chile in 1883-1906).
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- Africa: One of the biggest gold rushes in Africa was the Witwatersrand Gold Rush (Johannesburg, South Africa in 1886). Currently, Ghana is going through a gold rush of sorts — it’s on the Gold Coast of West Africa.
Historical and Contemporary Prices
It could be said that gold has increased in value from 1 shekel back in Ancient Egypt to thousands per troy ounce in today’s economy.
The price of gold has certainly risen and fallen throughout the millennia, but it’s consistently proven to be one of the safest assets across many centuries. Gold and other precious metals can be a strong store of wealth when empires and economies are strong, and can serve as an insurance measure when empires are failing. No matter who governs next, they’re going to accept gold.
In the past few decades, gold has seen a steady general trend upward. According to Statista, gold has yielded an annual return rate of 8.86% annually over the past 20 years.
