A Brief History of Gold

You may wonder why Dorado Vista, Inc. is interested in gold.  The reason is that the company ranch is bisected by one of the richest gold placer creeks in California.  This has an added element of excitement when looking at the future of the company.  For now it is only a minor prospect, but in the future God only knows... The prospecting, excitement and history are well worth the effort!  Let's look at some historical facts regarding Gold...

Look at the current rise in the price of Gold from about $20-35(~1900) to somewhere around $300 (early 1980's). At the end of 2007 we see Gold returning to about $850 US. So remember when the reference for Gold is given for a creek in California in 1900 US Dollars the typical price back toward 1900 was $20. This means today's price is about 40 times higher. Before you start jumping up and down with joy, think about what has really happened; The US dollar has experienced a 40 fold inflation in the last century. The value of a standard reference commodity called Gold costs you 40 times as much. That's a bad thing, there's nothing like losing 4000% in value.

Gold has been a precious metal for as long as humans can remember. The reason it is precious is that it is universally accepted as a monetary exchange medium, its useful, beautiful and hard to find.  It is said by some that most of the world's gold supply has been removed from the ground and melted into bars and coins, but in reality only 1% to 20%  has been taken, depending on who you talk to. That leaves 99% to 80% of all the gold in the world still in the ground! People have always wanted gold and because of that there have been many gold rushes around the world.   A gold rush is a period of time when people race to the Gold panning fields where gold has been discovered to work hard and try to grab their share of the riches.

Not many miners got rich in the 1800's.  Often prospectors would go home with less than when they started out on the journey, if they made it back at all.  Some mining claim owners did strike it rich, although most didn't.  Besides the lucky few with fortunes in gold, the ones that made it big were the prospecting tool marketing entrepreneur's.  People who had these entrepreneurial skills and initiative to establish a business and take the risk did very well.  For example, Levi Strauss the inventor of Levis blue jeans was one of these in the California 1849 gold rush.  Lester Pelton inventor of the Pelton wheel got started by supplying Gold Mines with efficient Hydropower generators.

One more way an entrepreneur accomplished this feat was by taking goods from stores in town out to the remote mines and placers.  Goods that included precious food that the miners didn't have, like kegs of butter or berries for example.  They would take the goods up to the gold fields and sell it for many times the price they bought it for. Another thing was to buy up all the mining equipment they could.  They bought tools like picks, shovels, and gold pans and sold the equipment somewhere up in the mining claims for many times the price as well.  Supply and demand in action.

Back in the past gold had a fixed price called the gold standard, which was around 12 to 35 dollars an ounce at that time.  When the United States took the dollar off the gold standard in 1971, in 1979 the price of gold quickly rose to $850 an ounce. By 2007 this would be valued around $2,600 an ounce when corrected for 4% inflation.  Shortly after this rise, it fell to $300 to $400 an ounce.  The current spot or market price as of January 2008 was over $860 per ounce. If you find a good sized nugget it's market value may be 2 to 4 times higher. 

Sometimes specimen quality gold sells for 2 to 4 times higher than the spot price of bullion!  Where the specimen spot price is the value per ounce actually paid for a rare specimen of raw gold.   For jewelry and for nugget collectors the price is typically higher than the spot price based on the quality and rarity of the specimen.   See the kitco.com chart below for today's gold bullion prices.

One interesting fact is that a 1 ounce gold nugget is rarer than a 5 carat diamond!  Many of the best nuggets in history went to the smelter to make bullion before this fact was known.  Now you should be careful not to even scratch a similar specimen!  After all just think of it, diamonds are just another form of carbon! 

On the other hand, with the right geologic conditions, sometimes Gold, Platinum and Diamonds share placers.  The old prospectors often did not know the Platinum or Diamonds were there.  In raw form they aren't as remarkable in appearance as Gold.  That also means there are still a lot more of these precious prospects out there! 

See www.DoradoVista.com/DVNews.php and www.DoradoVista.com/Links.html for more pages on Gold.

Visit www.goldfun.com for some more great information and lessons on how to prospect for Gold.