Let us start with the definition of gold standard. The Encyclopaedia of Economics and Liberty, an essay on gold standard, defines the gold standard as "a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National currency and other forms of money like bank deposits and notes were liberally transformed into gold at the permanent price."
The first gold coin in the history has been by the Lydia in 643 B.C. They were made of a crude material naturally occurring, and were a mixture of gold and silver. The Midas touch and the Celts are prominent historical achievements towards the evolution of modern-time gold standard setting. Then the Romans came with gold, silver, bronze and copper coins. After the death of Julius Caesar, gold coinage became very important in the Roman Coinage system.
The first ever one-pound coin was the gold sovereign, which came into existence in the year 1489 under the kingdom ship of King Henry VII. The Pound Sterling has been regarded as a unit of currency for centuries. This coin denomination was circulated with a weight of 240 grains equal to 0.5 troy (15.55 g) and was smelted using the standard gold coinage alloy of about 23 carat (95.83% fine).
It was 1971 when gold was priced as $38 per ounce, and in 1973 as $42 per ounce. As the dollar lost its value, people were stimulated to sell their US dollar hoards in lieu of gold. At last, in late 1973, the U.S. government separated the value of dollar being affected by gold altogether and vice versa. It was then that in the open market, the price of gold soared to the peak of $120 per ounce.
In 1946, system of fixed exchange rates was created by the Bretton Woods System. Through this system, United States treasury was made bound of buying gold from other governments on a fixed price that was $35 per ounce. Nobody could violate this law to buy or sell gold above or at low price than $35 for per ounce. This system came to an end on August 15, 1971.
Britain too was the initial industrialized power and had embraced the gold standard around the 1820s. The United States did not follow the trend till 1873, when the Coinage Act took place. France and Germany then followed the steps of the US after some time.
The first gold coin in the history has been by the Lydia in 643 B.C. They were made of a crude material naturally occurring, and were a mixture of gold and silver. The Midas touch and the Celts are prominent historical achievements towards the evolution of modern-time gold standard setting. Then the Romans came with gold, silver, bronze and copper coins. After the death of Julius Caesar, gold coinage became very important in the Roman Coinage system.
The first ever one-pound coin was the gold sovereign, which came into existence in the year 1489 under the kingdom ship of King Henry VII. The Pound Sterling has been regarded as a unit of currency for centuries. This coin denomination was circulated with a weight of 240 grains equal to 0.5 troy (15.55 g) and was smelted using the standard gold coinage alloy of about 23 carat (95.83% fine).
It was 1971 when gold was priced as $38 per ounce, and in 1973 as $42 per ounce. As the dollar lost its value, people were stimulated to sell their US dollar hoards in lieu of gold. At last, in late 1973, the U.S. government separated the value of dollar being affected by gold altogether and vice versa. It was then that in the open market, the price of gold soared to the peak of $120 per ounce.
In 1946, system of fixed exchange rates was created by the Bretton Woods System. Through this system, United States treasury was made bound of buying gold from other governments on a fixed price that was $35 per ounce. Nobody could violate this law to buy or sell gold above or at low price than $35 for per ounce. This system came to an end on August 15, 1971.
Britain too was the initial industrialized power and had embraced the gold standard around the 1820s. The United States did not follow the trend till 1873, when the Coinage Act took place. France and Germany then followed the steps of the US after some time.
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