How Gold Has Changed The World Economy


The discovery of gold in the New World 500 years ago radically changed the world economy and its place in history. With gold’s spread to Asia, and then quickly to Europe and beyond, it became the most desired and sought-after commodity on earth. Gold has saved empires, determining futures, and shaped our world as we know it today. This article will explore everything you need to know about that shining metal – including its origins, uses, and even its spiritual significance!

So, What Is Gold?

Several countries such as the United States, Canada, and Mexico produce small amounts of gold today. However, it is expected that Africa will soon rise to become the leader in world gold mining. Gold comes from meteorites, but it is also mined in mines deep underground (where temperatures can reach above 120 °F/50 °C). Gold cannot be made artificially, which means that it is quite rare. Because of its rarity, it has become the premium standard for currencies around the world. The gold used in the past as currency are now gold coins for collectors that still circulate and might even have a higher value based on the type. The value of gold also depends on its purity. During the last decade, production has averaged about 2,500 metric tons per year. About 80% of the world’s gold comes from South Africa, but most of that amount is mined near Johannesburg and nearby areas.

Gold In Today’s Economy

Today, gold is used to protect national currencies. For instance, in America’s case, if someone wants to exchange U.S. dollars for another form of currency, they are required to use the Federal Reserve System which uses gold as its basis. Gold has been considered a safe investment in times of economic crisis when paper money becomes less valuable because it can be redeemed for gold. It’s also considered a hedge against inflation, making it attractive to own when economic growth is low and prices stagnate or fall. Also, gold can be hoarded, or saved until needed. For example, if a country’s enemies are gaining power and the threat of war becomes more real, gold can be used as collateral to pay for armaments. Gold also plays an important role in technology. The hard metal is used to make electronics because it conducts electricity well.

Gold Is Not Used As Money Anymore

Although the U.S., Canada, and most other countries no longer use gold as their currency, there are still about 30% of countries that have a currency that is pegged to gold. Gold prices are always changing, but the total value of all the gold in the world adds up to about $8 trillion as of 2014. It’s been estimated that there might even be enough gold in the world for every person on earth to have an ounce! Today, gold is used in jewelry and electronics. For instance, it’s estimated that about 60% of the world’s gold production each year is used for making jewelry due to its malleability and resistance to corrosion. Over 100 million pounds of scrap metal from old computers and other devices are recovered each year so they can be melted down to extract the gold. Although it’s used to make electronics, most of that amount is usually sent back to refineries where it goes through other processes before being used for this purpose again.

The Value Of Gold

Gold has been highly valued throughout history by many civilizations because of its rarity and beauty. It was once considered precious in ancient Egypt, Greece, and Rome. Some historians have suggested that the first real money appeared in about 650 BC, but it was mostly trading of goods with gold acting as a type of check or a unit for transactions instead of actual coins used as currency. In those days, one pound of gold bought over 100 loaves of bread. If you wanted to hire someone to work for you, it would take about 20 ounces of gold to pay him or her annually. The value of gold often changes with its market price, which can vary depending on how much is available and demanded by investors, jewelry makers, and industrial users. Today, there are about 180,000 metric tons of gold in existence throughout the world worth an estimated $7 trillion. Some of it is in electronics, old coins, and bullion deposits in banks. 

The Value of Gold

Gold is used worldwide in the forms of jewelry, electronics, and currency. It is considered one of the most precious elements on earth, with its rarity being attributed to it being valued by civilizations for centuries due to its shiny beauty. Gold is also known as a safe investment when economies are struggling with high inflation or deflation. Its value can change depending on its availability and demand, but it is still considered valuable in helping currencies remain stable. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.