Imagine for a moment that you’re an ancient farmer with a bag of barley and you need goat skins for a new tent. Your trip to the market could be quite a challenge. If you’re lucky, you’ll find a goat herder who wants barley. But what if the goat herder needs a clay vessel? You may have to find a potter who wants barley, then trade your wares for the pottery and the pottery for skins.
Now you can imagine, what a breakthrough invention money must have been. Finally, there was a single standard of value that could be easily exchanged for goods or services. But like any brand new concept, there were hurdles to adoption. Money had to have an inherent value that could be accepted by merchants. That is, it had to have a value that all could agree on.
One of the earliest forms of money might have been a shekel of barley or another grain. The shekel was a unit of weight. It’s possible that the equivalent weight in silver may have been the silver shekels mentioned in Genesis of the Bible. Using grains as currency, however, had one big problem. You had to eat it before it rotted, which means the value of such money deteriorated with time and eventually became worthless. Something was needed that was inherently valuable, that could last.
Gold, Silver, and the Concept of Durable Wealth
Metal currencies, particularly gold and silver, was the solution. The rarity of these metals gave them an inherent value. As durable materials, they hardly deteriorated and lasted well through time. They were also dense and malleable, allowing precise weights and shaped to be created.
This is just what people of ancient times needed to successfully trade, and the use of silver and gold for barter quickly spread. It was not long before coins were struck, allowing denominations to be established. Gold and silver coins grew in acceptance and enabled commerce in the Greek, Roman, and Byzantine empires. Many of these coins survived the ages and you can buy them today.
Rise of Modern Banking
Did you know that the first bankers were goldsmiths? By the sixteenth century, merchants and governments were using gold and silver to settle accounts. Merchants who had amassed large amounts of gold would pay local goldsmiths to safeguard gold in their vaults. When goldsmiths saw that they could lend the gold out with interest, they began to pay interest to the merchants. In fact, goldsmiths would give each merchant a receipt that certified the weight and purity of the gold they hold. These receipts became forerunners of banknotes.
Rise of the Gold Standard
Spurred by major discoveries of gold in the 17th, 18th,and 19th centuries, governments began to adopt gold as the currency of choice. Many countries, including the U.S. adopted the gold standard. This fixed the value of a currency—the dollar, pound, franc—to a specified amount of gold.
With so many countries using gold and silver as currencies, there came a need to fix the prices internationally. In 1897, bankers began to meet every day in London to bid on and fix the price of silver. In 1919, the first fixing of gold prices took place in London. Gold and silver coins from this era circulated widely and are still popular with stackers and collectors today.
Though major economies don’t use the gold standard today, the market remains very dynamic. The London Bullion Market Association continues to oversee the wholesale markets for gold and Silver to this day, but prices change every few minutes. At MCM, prices are updated every 60 seconds.
How Gold and Silver Are Priced Today
In the black band across the top of this page, and every ModernCoinMart.com page, you can see the up-to-the-minute spot price for one Troy oz. of gold, silver, platinum and palladium. The Troy oz. is the standard weight used in global precious metals markets. At 31.1035g it’s a bit heavier than the standard kitchen, or Avoirdupois, ounce (28.3495g).
Spot prices are driven by global supply (from miners and recyclers), demand (for jewelry, industry or bullion), and speculation on future prices—futures contracts. Today’s gold and silver trading in the major financial markets of Europe, Asia, Australia and the Americas, prices change can every few minutes, 24 hours a day and, except for a couple of hours on Sunday, 7 days a week.
Understanding Bid, Ask, and Spread
When you click on any of thespot prices at the top of this page, you come to a more detailed picture of the global market. You can see historical prices, as well as current bid and ask prices.
The “bid” is the price that global markets will pay for a Troy oz. of metal. The “ask” is the price they will sell it for. The difference between bid and ask is called the “spread.” The spread widens and narrows based on the amount of trading at that moment. A narrow spread means there’s a lot of trading. A wide spread means there’s less.
Advantages of higher silver purity in coins
There are also a number of other reasons why the switch to purer silver coins is beneficial, particularly in terms of manufacturing of coins.
The Mint did a comparison between the 2012 Infantry silver dollar (made of .900 silver) and the 2013 Proof American Silver Eagle (made of .999 silver), which found that the die life (the number of coins that can be made with the same die) was three times better with .999 silver; the amount of scrap metal left over during production was 4% less with .999 silver; and the number of products Mint customers returned was .7% less.
What is Live Pricing?
ModernCoinMart constantly adjusts prices to reflect the global market for gold and silver. This is called live pricing. When you proceed to our checkout, you freeze the price for the ten minutes it takes to complete your order. Even if the price of gold goes up in that time, you will not have to pay more.
Take advantage of this service to get up-to-date pricing on the gold and silver coins you want!
From the beginning of civilization, man has traded goods and currency to advance in life. By getting a basic understanding of the history of currency, you also are able to have a more fruitful coin collecting experience.
As society continues to move forward with future currency practices, thousands will continue to collect and admire coinage from past and present times. Shop MCM’s variety of silver and gold coins today to add a piece of history to your collection!