Gold Evolution

Gold discovery and use of human history than copper, iron and other metals earlier, dating back 10,000 years ago was discovered Neolithic humans. Because gold itself has good stability and rarity, gold became precious metals, known as a reserve asset. Since gold has a special natural attributes, it had been given the money function.

(1)Gold was aristocratic monopoly period

Before the 19th century, because gold is extremely rare, gold is a symbol of imperial wealth and power; though the 6th century BC appeared the first gold coin in the world, but the people it is difficult to own gold.

Gold mine to belong to the royal all, was by slaves, prisoners mined under extremely harsh conditions difficult. It is on this basis, gold cultivate from ancient Egypt and Roman civilizations. 16th-century colonists in order to plunder the gold and the local ethnic killings, destruction of cultural heritage. Looting and reward become the main form of gold in circulation, difficult to develop free trade market, thereby limiting the freedom of trade size of gold.

(2)Gold Standard

Gold as a universal medium of exchange and a wealth of measurement standards for thousands of years. We must recognize the important role of gold in modern human society, we must first understand the past history of human society for a long period of time, the special status of gold in the financial sector social history of the evolution of mankind.

In the long-term development of human society, was given a monetary value of gold function, after a long history of evolution of the establishment of the gold standard monetary system of gold, the gold standard is a monetary metal in gold as currency in circulation system, is the late 19th century to the 20th century half of Europe and the capitalist countries to implement a common monetary system.

First, the gold standard was born in the industrial revolution of the European countries, in 1717 the British first implemented the gold standard, to 1816 Britain enacted the "gold standard bill," the official identified in the system administration, become the basis for the British monetary system, to the nineteenth century Germany, Sweden, Norway, the Netherlands, the United States, France, Russia, Japan and other countries have announced the implementation of the gold standard.

The main content of the gold standard system includes:

1) Gold to specify the value of the currency issued by representatives of national currencies according to their weight in gold and contained a certain price relations;

2) Coins can freely cast, anyone can be handed over to the National Mint BRIC into gold, or gold to the Mint in exchange for considerable BRIC;

3) Gold is unlimited legal tender currency, has the right to unrestricted means of payment;

4) States currency reserves of gold, international settlement also use gold, gold can be freely exported or imported, when the international trade deficit, may be paid in gold.

The gold standard has a free casting, freely convertible, freely input and output. With the formation of the gold standard, gold assumed the general equivalent commodity exchange.

A total of 59 countries around the world practiced the gold standard, some countries implement up to two hundred years, only a few years in some countries, but China has not been implemented.

(3)BRIC-based system

Britain stopped the gold standard in 1919, restored in 1926 using; Under this system, the bill can only convert 400 ounces of gold bullion international sanction. Europe and other countries in the same period have strengthened trade controls, ban free sale and import and export of gold.

After World War I, the economies of many European and American capitalist countries by inflation, the impact of the rapid rise in prices, coupled with the gold distribution is extremely uneven, it has been difficult to restore the gold standard system. We decided to adopt the principle of "saving gold", the implementation of BRIC-based system and the gold exchange standard on 1922 in the city of Genoa, Italy at the World Monetary Conference.

BRIC countries implement standard system mainly Britain, France and the United States. Central banks issue banknotes currency unit still provides gold, but gold only as a reserve currency issuance concentrated in the central bank, no longer cast gold coins in circulation and the implementation of monetary entirely replaced by a bank-issued currency notes currency unit, holding banknotesIt can be prescribed gold and gold exchange. Central bank to maintain a certain amount of gold reserves in order to maintain contact between gold and currencies.

(4)Gold exchange standard

Gold exchange standard, also known as "virtual gold standard." Not circulate coins, banknotes in circulation only; the bill is not directly convertible gold, foreign currency exchange only.

Before the First World War in India, the Philippines, Malaysia, some Latin American countries and regions, as well as Germany, Italy, Denmark, Norway and other countries in the 1920s, and are implemented through the system.

BRIC-based system and the gold exchange standard is being undermined international gold standard, essentially reflects the scarcity of gold and banknotes issued flood compromise.

(5)Gold - an important role to play in the Bretton Woods system

May 1944, the United States invited to participate in the preparation of the United Nations on behalf of 44 governments met in Bretton Woods the United States, after a heated debate all parties signed the "Bretton Woods Agreement", the establishment of a new international monetary system. Bretton Woods is actually an international gold exchange standard, also known as the dollar - the gold standard. It makes the dollar at the center of the postwar international monetary system, since then, the dollar has become the major international reserve currency means of payment and liquidation countries. The Bretton Woods system is based on the dollar and gold-based gold exchange standard.

The core of the Bretton Woods international monetary system is:

● The dollar is the international currency settlement basis, is a major international reserve currency.

● Directly linked to the dollar and gold, other currencies pegged to the dollar, the United States obligations of $ 35 per ounce official price of gold convertibility.

● A fixed exchange rate system. National currencies and the dollar, generally only in the parity of 1% of the amplitude fluctuations up and down, so the fixed price of gold also implemented the system, such as excessive volatility, central banks are obliged to intervene as necessary and to recover within a predetermined range.

The Bretton Woods monetary system, the role of gold in terms of functional currency in circulation or in the functional aspects of international reserves are limited, because almost all the gold in the world is controlled by the US government, and other countries almost no gold. No gold reserves, there is no issue banknotes reserves, this time to rely on US dollars. So the dollar as the world currency system in the lead, but we have to note that gold is stable the last barrier to the monetary system, so the price of gold convertibility and liquidity are still subject to very strict control of governments, countries basically prohibit residents free sale of gold, the gold market pricing mechanism is difficult to play an effective role. USD substitution past gold.

(6)The Bretton Woods system collapsed

1960s, the dollar can not be suppressed inflation, the European countries earlier postwar economy started to recover, national economic recovery because of growing wealth and have more and more dollars. Because of inflation triggered by the devaluation of the US, gold has become the best choice for asset preservation. By 1971, US gold reserves fell by more than 60%. The American government was forced to abandon the US dollar at a fixed official price of gold policy, various Western countries have currencies from the dollar, gold prices float freely enter the market in the period, the total collapse of the Bretton Woods international monetary system.

(7)The period of non-monetary gold

In 1976, after the "Jamaica Agreement" adopted by the International Monetary Fund and the two-year program to modify the agreement to determine the non-monetary gold. The main contents are:

Gold is no longer the standard value of currency parity;

Abolish official price of gold, IMF no longer intervene in the market, floating price;

Cancellations must be carried out with gold dealings with the fund settlement provisions;

The sale of IMF gold reserves 1/6 of the profits to help low-income countries to establish preferential loan funds;

SDRs instead of gold set up to pay for some of the members and between members and between the IMF.

Jamaica system in 1976 declared "non-monetary gold", the functions of the world's gold as currency in circulation decreased. However, gold's financial attributes and not reduced, gold still is a special commodity, means and tools of investment preservation, collection commodity function and financial functions in one.

As a special precious metals, gold is still the world is currently favored by major international reserves. Today gold is still recognized as a financial asset investment activity in the financial sector, act as a country or individual in reserve assets. Currently gold is still internationally acceptable following the US dollar, euro, British pound, Japanese yen after the fifth-largest hard currency. In the new historical period of the current changes, in turn golden glow of bright light to new!

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