National Geographic : 2009 Jan
• La Rinconada is one of the frontiers of a thor- oughly modern phenomenon: a 21st-century gold rush. NO SINGLE ELEMENT has tantalized and tormented the human imagination more than the shim- mering metal known by the chemical symbol Au. For thousands of years the desire to pos- sess gold has driven people to extremes, fuel- ing wars and conquests, girding empires and currencies, leveling mountains and forests. Gold is not vital to human existence; it has, in fact, relatively few practical uses. Yet its chief virtues---its unusual density and malleability along with its imperishable shine---have made it one of the world s most coveted commodi- ties, a transcendent symbol of beauty, wealth, and immortality. From pharaohs (who insisted on being buried in what they called the " esh of the gods") to the forty-niners (whose mad rush for the mother lode built the American West) to the nanciers (who, following Sir Isaac Newton s advice, made it the bedrock of the global economy): Nearly every society through the ages has invested gold with an almost mythological power. Humankind s feverish attachment to gold shouldn t have survived the modern world. Few cultures still believe that gold can give eter- nal life, and every country in the world---the United States was last, in 1971---has done away with the gold standard, which John Maynard Keynes famously derided as "a barbarous relic." But gold s luster not only endures; fueled by global uncertainty, it grows stronger. e price of gold, which stood at $271 an ounce on Sep- tember 10, 2001, hit $1,023 in March 2008, and it may surpass that threshold again. Aside from extravagance, gold is also reprising its role as a safe haven in perilous times. Gold s recent surge, sparked in part by the terrorist attack on 9/11, has been ampli ed by the slide of the U.S. dollar and jitters over a looming global recession. In 2007 demand outstripped mine production by 59 percent. "Gold has always had this kind of magic," says Peter L. Bernstein, author of e Power of Gold. "But it s never been clear if we have gold---or gold has us." While investors flock to new gold-backed funds, jewelry still accounts for two-thirds of the demand, generating a record $53.5 bil- lion in worldwide sales in 2007. In the U.S. an American Revolution Civil War World War I Beginning of the Great Depression World War II 1971: U.S. deregulates gold Adjusted for inflation, price per ounce in 2008 dollars 1,000 1,500 $2,000 2000 1900 1950 1800 1750 1850 1718 What It's Worth The price of gold was first standardized in late 1717 by Sir Isaac Newton, then England's Master of the Mint. In coins and later as backing for paper money, it fluctuated with world crises and market forces. After 1971, when the dominant U.S. dollar was no longer tied to gold, the metal became a freely traded, often volatile, commodity. As an investment hedge against rampant inflation, gold reached a historic high in 1980.