Essay on History of Trading Gold

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The history of gold has its mention in the ancient ages of human beings. It is believed that in 560 BC, one of its kind of first coin was introduced by the Greek state of Lydia in Asia Minor. It tends to be one of the most rarest and difficult metal to be mined and hence it was used as a currency in the earlier times. It was very highly valued and was used while trading among different nations of the world. When the price of gold was standardized and fixed across the globe in the international market trading gold was not applicable.
Since ages, it has been observed that gold represents wealth and social position in the society. It turns out to be an important material of trade and business. It was highly regarded as the currency that tends to have several effects on the trading relations of the world. It helped to decide the power and wealth of a specific country, when the total amount of gold that they possess is equitized at the global level at the standardized level. Gold has always had a huge impact on the market across the globe. It was one such commodity that was responsible for establishing a respectable position in the society. It has been gaining such significance and value since the value of money that is in the form of paper through currency is not certain and it changes from one country to another. Hence, in order to determine a standard liquidity that can be used as a commodity in the global trade, trading gold for the other commodities or considering it as one form of cash has been achieved (Bernstein).

Initial phase:
The first price of Gold was sent in 1946, through the Bretton Woods Conference and its price was fixed at $35 per ounce. It was aimed at creating a gold standard in the United States. It has set a benchmark in the trading history, where during the times after World War 2, countries kept their currency at a rate that was near the US dollar and the amount should equally be divided into gold as it had a stable price over the globe. There became huge presence of gold in US when there value increased through their dollar gaining value in against the value of gold that has been constantly increasing in power due to which Europe started becoming weaker. It is also known as the Bretton Woods Agreement that aimed controlling the activities in the international finance, that is Forex market and to eradicate the harmful effects of World War II developed among the entire generation (TRADEGOLDONLINE.COM).
However, in 1971, Bretton woods Agreement when gold was no longer exchangeable with US dollars. The market became supply vs demand oriented and the main functions of trading included developing of new financial instruments and institutions for the same. It was established by President Nixon, where the system of paving gold and trading across the different nations was permitted and the value of US dollars started increasing. In 1974, there were many gold trading opportunities explored when the ban regarding the private ownership of gold by the citizens of US was relaxed by through the legal bodies concerning with the trade and finance policies in the US government. Gold has been involved with the development of ornaments and design among the people (EASY-FOREX.COM).

Current scenario:
Gold trading is very easily available these days with a large number of companies and ventures who have their share in the contribution of the share market and currencies among the different countries of the world. It was brought on one level through the US dollar currency and trading of gold became a part of the bonds and joint ventures that one have to observe while developing a partnership with the different financial bodies and departments across the big financial exchange companies on a global level. Carrying the trading of gold online can be carried out through Forex market (TRADEGOLDONLINE.COM).
There are many other options that are readily available to the financial investors for depositing their money and equating it through the national rates of exchange that are developed for gold. It involves providing money that would be equal to the gold credits to the countries who need it. Many countries deposit their gold in the World Bank and it handles the flow of finance very smoothly for each and every nation across the globe. There are many economic as well as political considerations that are very much influenced by the rate of gold in the international market and its exchange in terms of currency (EASY-FOREX.COM).
Currently, with the advancement in technology and increasing awareness among the people related to the Forex market, there are new parts to be developed by the Forex market as each and every member across its existence would be getting the benefit of considering gold as a substitute for money regarding different set of financial activities and investments that is required to be made through them (EASY-FOREX.COM).
Thus, it can be stated that the journey of trading gold across the history of humans has constantly increased the value of gold in the market and its capabilities to be a crucial factor in establishing the trading relations with other nations and estimation of the financial value that has been generated across the international finance market by the globalized banks. It can be observed that how the trading through gold has become standardized and systemized that it will be supporting the main framework consisting of the market demand and customer satisfaction. Gold has attained the stature of being considered as one form of currency through the international financial market and different aspects of trading gold against currency for dealing with factors that are related to the development of currency through notes.

Bernstein, P. L. The power of gold: the history of an obsession. . John Wiley & Sons., 2012.
EASY-FOREX.COM. Gold Trading History. 2016. 13 March 2016. .
TRADEGOLDONLINE.COM. The History of Trading Gold. n.d. 13 March 2016. .


Posted on

March 9, 2018

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