The paper "Key Factors Influencing the Purchasing Behavior in Gold Ornament" is a perfect example of a Marketing Case Study. Perhaps the earliest use of gold is in what is today Eastern Europe, where civilizations there used the precious metal, mined from Transylvanian Alps to fashion decorative objects in 4000 B. C. Other instances of early use of gold include the Sumers of Iraq, Egyptians and the Babylonians (NMA, 2015). It was around about 1500 BC that the commercial use of gold began proper, with the shekel becoming the standard measurement unit in the Middle East.
It was a coin that contained part gold and part silver, together with a naturally occurring alloy called electrum. The shekel coin weighed 11.3 grams. Gold has endured through the years, from the earliest BC years too late BC, where the first coins made purely from gold were made(NMA, 2015). In the 19th and twentieth centuries, gold gradually replaced silver as the currency of choice. It became the basis of the world capitalism monetary movement, the biggest standard of price and the true measure of value. The functions of gold and its endurance as a valuable commodity, luxurious good, financial and monetary asset are further reinforced by its physical properties.
It is practically indestructible, highly durable, maintains its physical properties and does not tarnish like silver. It is malleable and therefore easy to divide, and has a high weight to volume ratio, which makes small quantities suitable for transport and transactions (Schenk, 2013). Despite its suitable physical and functional properties, not much has been written on the metal’ s history and usage, at least until the political elites of the world placed it at the center of the international monetary system in the 19th and 20th centuries.
The gold standard was a pivotal time in the history of the gold market. A genuine gold standard refers to the basic monetary unit where a specific weight of a gold alloy of some purity, or the equivalent on pure gold. Prices are therefore expressed either in this unit or in fractional units that are based on this unit (Selgin, 2013). The Global gold standard movement grew in the decade between 1870 and 1880, driven mainly by pioneering France getting rid of free silver coinage in 1873 followed by the Latin monetary Union in 1876.
Germany’ s gold switch and the US then sealed the deal (Selgin, 2013). The gold standard era lasted until around about the First World War. During times of war, it is common for countries to abandon their commitment to convertibility. During and after the war, the gold standard failed as a result of its dependence on the collaboration of central banks. So important was the gold standard that many believe it to be connected to the great depression of the twenties.
Countries not on the gold standard did not experience the worst of the depression, and those who were on the standard only experienced improvements when they went off it (Irwin, 2012). Other important events in the 20th century with regards to the gold market include the reopening of one of the most iconic gold markets, the London gold market, in 1954. While Americans were forbidden to own gold both abroad and at home in 1961, the central banks of Belgium, Italy, France, Switzerland, West Germany, The US, and the Netherlands agree to form the London gold pol, which saw them agree on the buying and selling price of gold at 35.0875 dollars per ounce.
In 1967, South Africa produced the Krugerrand, one-ounce bullion which later became an investor favorite. Events in 1968 further shaped the Gold market, with the London Gold Market closing temporarily for two weeks as a result of a sudden surge in the demand for gold(NMA, 2015). Consequently, the governors of the central banks of the London gold pool countries agree on a two-tier pricing system, which saw them agree not to sell gold on the private market again(NMA, 2015).
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