Gold is considered one of the oldest known means of exchange for humanity, serving a dual role as both a commodity and a currency. Gold has amazing properties; it is soft, dense, shiny, lustrous, and malleable.
The History and Symbolism of Gold
Throughout history, civilizations have longed for gold. Even today, gold remains the ultimate prize. It is not just an award and a symbol of wealth, but also a metaphor. It is an honor to receive a gold medal, or to be told you have a heart of gold, or to possess a gold credit card.
The exchange of gold rings symbolizes love and marriage in many societies. Gold is the supreme symbol of human achievement. Even today, it continues to be a psychological measure of market sentiments. Gold is a rare metal. In world history, mining has produced only 187,000 tons of gold.
The importance of gold is highlighted by the fact that governments around the world hold gold as a foreign exchange reserve. Historically, many governments have used gold to back their currencies, leading to the establishment of the gold standard.
Gold vs. the US Dollar
Nowadays, while governments hold large quantities of this yellow metal, they do not use it to back paper money. Gold is typically priced in US dollars. Thus, there is a relationship between the price of gold and the dollar, where fluctuations in the value of the dollar can impact gold prices.
Despite the significance of the relationship between the value of the US dollar and gold, the dollar is not the only factor affecting the price of the precious metal. Other factors that influence the value of gold and the dollar include interest rates, inflation, monetary policy, and supply and demand.
The Role of Gold
The role of gold as a currency worldwide is indispensable. Throughout history, gold has been money. The ancient philosopher Aristotle wrote that money should be durable, divisible, consistent, and convenient, and should have intrinsic value.
Gold meets all these criteria. During periods of fear or geopolitical turmoil, the price of the historic metal rises as trust in governments wanes. During times of calm, the price of gold decreases. As perhaps the oldest and most famous currency in the world, gold serves as a fundamental measure regarding the global economy and political status.
Frequently Asked Questions (FAQs)
What is the current value of gold in dollars?
In June 2021, the price of an ounce of gold ranged between approximately $1750 and $1900.
What is the value of the gold dollar coin?
There have been some times in history when the United States minted coins worth $1 made from actual gold. The last regular gold dollar coin was minted in the late 19th century. Today, the value of these coins depends on their condition. The coins of worse quality are generally worth their melt value, which is around $150, whereas collectors will pay more for a coin in good details. These coins are different from the gold-plated Sacagawea coins that the United States began minting in the early 21st century. Those newer coins do not contain real gold and are worth exactly one dollar.
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Sources:
– United States Geological Survey. “How much gold has been mined in the world?”
– World Gold Council. “Monthly central bank statistics.”
– A.C. Reardon. “The discovery of metals – A historical perspective.” Non-Metallic Minerals, 2nd edition, p. 73.
– Fergal O’Connor, LBMA Bursar, Brian Lucey. “The negative relationship of gold with the US dollar,” Chemist, issue 66, p. 16.
– US Census Bureau. “US and world population clock.”
– Stanford Encyclopedia of Philosophy. “Philosophy of money and finance.”
Source: https://www.thebalancemoney.com/the-relationship-between-gold-and-the-u-s-dollar-808978
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