Gold, chemical symbol Au (from the Latin aurum meaning ‘shining dawn’), is a precious metal which has been used since antiquity in the production of jewellery, coinage, sculpture, vessels and as a decoration for buildings, monuments and statues.
The first ancient civilisation to use gold in jewellery were the Egyptians from as early as 5000BCE. In most ancient cultures gold was popular in jewellery and art because of its value, aesthetic qualities, ductility and malleability.
However, although they had relatively primitive technologies and resources, in comparison with what we have at our disposal today, the Egyptians were incredibly knowledgeable about gold. They believed three things about its fundamental properties, namely:
A Heavenly metal
The Egyptians believed that gold had its roots in divinity. Gold was known as the tears of the sun and was what their gods and goddesses’ skin was made from. The symbol or hieroglyph for gold, Nebü (yes, that is where our name comes from) was often depicted alongside one of the gods or goddesses. In the image below, Isis is kneeling on the gold symbol.
Immortal
In the same line of reasoning, namely that their deities’ skin was made from gold, they believed that gold naturally had immortal powers. It was a standard practice that they buried their dead with all their gold possessions, to ensure prosperity in their afterlife.
Royal
The people across socio-economic classes always wore pure metal jewellery. Only the very wealthy and elite, such as royalty, wore gold. The upper to middle class wore more silver and finally your lower class wore copper. Thus, jewellery was a physical manifestation and show and store of wealth, not so dissimilar to its use today. Only the very wealthy could afford the yellow metal and their jewellery was often extremely elaborate.
Above is the death mask of Tutankhamun, made of pure gold is said to be worth approximately $2 million
These three fundamental beliefs are what the Egyptians built their fundamental understanding of gold on, 5000 BCE. It is quite amazing how sophisticated their understanding was, when it is married to modern day science and our understanding of gold today. Let us look at the ancient Egyptian beliefs, through the modern scientific lens, shall we?
Heavenly metal = Extremely rare
Some 200 million years ago, gold was created from a supernova nucleosynthesis, in the form of meteorites which pummelled Earth. This happened when Earth was molten and no life was found on its surface. It happened once. Were it to happen again, all life on Earth would be wiped out. Thus, all gold on Earth is finite. It cannot be recreated and it is highly unlikely that we will be able to go and get more of it.
Immortality = Inert to Oxygen
Gold, as we have previously addressed in What is Gold, is a noble metal. It is inert to oxygen and other elements that lead to the gradual decay of most organic matter over time. Pure gold, that was found in the tombs of the Ancient Egyptians and other ancient civilizations or at the bottom of the ocean in treasure chests, looks the same today as it did 1000’s of years ago, with very little restoration required. Gold is effectively indestructible and immortal.
Costly to extract
Each year, the world mines an average of only 4,000 tonnes a year of gold. To put that into perspective, the world produces the same amount of iron ore every two minutes, and that amount of copper every 2 hours. As we require roughly the same amount of labour and energy to dig up a ton of copper-bearing, as we do a ton of gold-bearing rock, the opportunity cost of producing a kilogram of gold is drastically more. . As a result, gold will always be cost proportional (stable value) to all other resources over time, even if the price fluctuates in the short term.
The gold that Ancient Egyptians mined was either Alluvial gold or relatively shallow to mine, but large resources were still required to extract it. Thus, even to this day, only the wealthy can afford to extract gold from the earth.
And so, there has been little change in the fundamentals of our understanding of gold, from the time of Ancient civilizations. Today we can prove those fundamentals through science. The key thing to understand is that these fundamentals – its extreme rarity, its nobility and its cost to extract – amongst other properties, still make gold the time tested store of value and status symbol.