The Gold Standard was a system under which nearly all countries fixed the value of their currencies in terms of a specified amount of gold, or linked their currency to that of a country which did so. Domestic currencies were freely convertible into gold at the fixed price and there was no restriction on the import or export of gold. Gold coins circulated as domestic currency alongside coins of other metals and notes, with the composition varying by country. As each currency was fixed in terms of gold, exchange rates between participating currencies were also fixed.
It was clear during the Second World War that a new international system would be needed to replace the Gold Standard after the war ended. The design for it was drawn up at the Bretton Woods Conference in the US in 1944. US political and economic dominance necessitated the dollar being at the center of the system. After the chaos of the inter-war period there was a desire for stability, with fixed exchange rates seen as essential for trade, but also for more flexibility than the traditional Gold Standard had provided. The Bretton Woods system was drawn up and fixed the dollar to gold at the existing parity of US$35 per ounce, while all other currencies had fixed, but adjustable, exchange rates to the dollar. Unlike the classical Gold Standard, capital controls were permitted to enable governments to stimulate their economies without suffering from financial market penalties.
The modern gold market is a picture of diversity and growth. Since the early 1970s, the volume of gold produced each year has tripled, the amount of gold bought annually has quadrupled and gold markets have flourished across the globe. Gold is now bought by a far more diverse set of consumers and investors than at any previous time in history.Gold has emotional, cultural and financial value and different people across the globe buy gold for different reasons, often influenced by a range of national socio-cultural factors, local market conditions and wider macro-economic drivers. Gold's diverse uses, in jewelry, technology and by central banks and investors, mean different sectors of the gold market rise to prominence at different points in the global economic cycle. This diversity of demand and self-balancing nature of the gold market underpin gold's robust qualities as an investment asset.
Mine production accounts for the largest part of gold supply — typically, 75% each year. However, annual demand requires more gold than is newly mined and the shortfall is made up from recycling. Gold Mining and its associated activities does not respond to price changes quickly. There is usually a very long lead time between exploring and finding new gold deposits and mines entering into production. As it is virtually indestructible, nearly all the gold ever mined is theoretically still accessible in one form or another and potentially available for recycling. Recycling is the source of gold supply that is most immediately responsive to the gold price and economic shocks. The majority of recycled gold - around 90% - comes from jewelry, with gold extracted from technology providing the remaining 10%. Of course, for gold to be of a guaranteed quality, it needs to be processed and refined. FactsIf all the existing gold in the world was pulled into a 5 micron thick wire, it could wrap around the world 11.2 million times.
The boiling point of gold is 2808 degrees centigrade.
There are just over 31 grams in a troy ounce of gold.
It is rarer to find a one ounce nugget of gold than a five carat diamond.
The temperature of the human body is 37 degrees centigrade. Gold's conductivity of heat means that it rapidly reaches body temperature — one of the reasons it has become valued for jewelry.
Gold melts at 1064 degrees centigrade.
Around 187,200 tons of gold has been mined since the beginning of civilization.
While digging up stones to build a house, Australian miner George Harrison found gold ore near Johannesburg in 1885, beginning the South African gold rush.
All of the gold ever mined would fit into a crate of 21 meters cubed.
Around half of all gold mined today is made into jewelry, which remains the single largest use for gold.
The 40,000 miners who joined the California Gold Rush in 1849 were called "49ers". Only a very small number of them ever got rich.
Julius Caesar gave 200 gold coins to each of his soldiers from the spoils of war in defeating Gaul.
Over 90 per cent of the world's gold has been mined since the California Gold Rush.
Gold is often alloyed with other metals to change its color and strength. Eighteen karat gold is composed of 750 parts of pure gold per 1,000.
The largest gold coin ever created was cast by the Perth Mint in 2012. Weighing one ton and measuring 80 cm in diameter, it surpassed the previous record, a 2007, $1 million coin which was just 53 cm across.
One ounce of gold can be stretched to a length of 50 miles; the resulting wire would be just five microns wide.
The largest ever true gold nugget weighed 2316 troy ounces when found at Moliagul in Australia in 1869. It was called the "Welcome Stranger".
The atomic number of gold is 79, which means there are 79 protons in the nucleus of every atom.
A "London Good Delivery Bar", the standard unit of traded gold, is made from 400 troy ounces of gold.
The US Federal Reserve holds 6,700 tons of gold, in 530,000 gold bars. At its peak in 1973, the Fed stored more than 12,000 tons of monetary gold.
There are 147.3 million ounces — around 4,600 tons — of gold stored in the US Bullion Depository at Fort Knox.
Even at only 10 parts of gold per quadrillion, the world's oceans are estimated to hold up to 15,000 tons of gold.
One ounce of pure gold can be hammered into a single sheet nine meters square.
One ounce of gold can be beaten into a translucent sheet 0.000018 cm thick and covering 9 square meters; or pulled into a wire 80 km (50 miles) long.