The Romans inherited the Greek monetary system and introduced the Roman gold aureus coin in 50 BC. The aureus coins above are from AD 50 - 54. Courtesy of CNG Coins

When President Richard Nixon unhitched the U.S. dollar from the price of gold in 1971, he ousted the metal from its 2,000-year position at the heart of global monetary systems. Its history dates back to around 700 BC, when King Croesus of Lydia struck the first gold coins.

Of the metals on the periodic table, gold is a logical contender for currency. It is dense, relatively easy to mine and dispersed fairly evenly throughout the world. Its eye-catching colour makes it difficult to fake. It does not rust or tarnish and, while unreactive, it has a low melting point and can therefore be processed and divided easily. Though it is scarce enough to remain valuable, gold is not so rare to be an impractical choice.

Lydia, now western Turkey, was an important and affluent trading hub, with trade routes stretching to Persia, Egypt, Greece, and Assyria. Gold coins quickly became used throughout the region as a fixed unit of exchange. The Romans inherited the Greek monetary system and gold buttressed the sprawling Roman Empire. New territorial conquests were often motivated by the acquisition of sources of essential raw materials including gold. The Roman gold aureus coin was introduced in 50 BC.

The Romans finessed the science of gold-mining, perfecting ‘hushing,’ which used powerful water torrents to loosen gold veins from mineral deposits. They diverted streams of water using aqueducts and used ground sluices to exploit placer deposits.

Roman gold was scattered across Europe after the fall of the empire in the fourth century. While gold coins continued to be used for trade in the Byzantine Empire (the eastern half of the Roman Empire, which lasted for a thousand years after the Western Roman Empire disintegrated), Europe was awash with silver, which dominated the European economic scene throughout the Middle Ages.

But gold had not been forgotten, and was struck again in various locations in Europe in the 14th century. Far-flung colonial conquests in the centuries that followed were often driven by the quest for gold.

Spain looted 164 tonnes of gold from Central and South America between 1500 and 1650, raising Europe’s supply five-fold. Spanish money became the world’s currency of reserve. (North America, South Africa, and Australia would all be plundered for their metal in due course.)

Europe introduced paper money in the 16th century but gold coins and bullion continued to dominate the monetary system for another 200 years. The ensuing tension between paper money and gold and bullion led to the introduction of a gold standard.

In its purest form, a gold standard is a system where countries fix the value of units of currency to a specified amount of gold or link their currency to a country that in turn backs its own currency to gold. In theory, paper money could be exchanged for gold at a bank.

Britain was the first to adopt a formal gold standard in 1821 and was joined by the United Province of Canada in 1853, Newfoundland in 1865, Germany in 1871, and the United States in 1879.

By 1900 all countries apart from China and a select few in Central America were subscribed to the international gold standard. Exchange rates were fixed, as everything was pegged to the price of gold. In theory, countries were supposed to have the gold reserves to back bank deposits and bank notes in circulation, but this was often not the case.

The system collapsed after the economic turmoil wrought by World War One and the Great Depression. Countries abandoned the standard in order to re-inflate their economies by printing more paper money.

Yet gold still played a supporting role. In 1944’s Bretton Woods agreement, leading Western powers pegged the rate of exchange of all foreign currency to the U.S. dollar, which in turn was backed by the States’ expansive gold reserves. The dollar was the logical choice, given that the U.S. held 75 per cent of the world’s gold reserves and did not have as much debt as war-torn Europe.

The 1971 “Nixon Shock” signalled the death of gold convertibility. The U.S. simply did not have the gold to back all the dollars in circulation. For the first time, the market would determine the price of gold – and it skyrocketed. It was meant to be a temporary move but the U.S. government made it permanent in 1976.

While banks still hold extensive gold reserves, the last major currency to be backed in part by gold was the Swiss Franc, which had a 40 per cent gold-currency ratio until 2000.

The gold standard continues to have its fair share of supporters, in particular among U.S. Republicans. In a 2016 interview with The Scene, then-presumptive Republican presidential nominee Donald Trump said “bringing back the gold standard would be very hard to do, but boy would it be wonderful.”