Gold is a precious metal which has fascinated mankind for hundreds of generations. The Chinese are no exception, and today on Taiwan per capita ownership of gold ranks third in the world after Japan and Indonesia. Since ancient times, the Chinese have considered gold to be symbolic of wealth, nobility and luck. Objects made from it are often given at weddings, birthdays and other auspicious occasions.
Archaeological evidence of gold being used in China dates back to the Shang dynasty (1,600-1,100 B.C.). Finds including ingots, gold thread and gold leaf, all bear witness to highly skilled craftsmen working with gold at this early date.
The earliest reference to gold currency in China is in the Kuan-tzu, dating back to the sixth century B.C., and a gold coin with two characters on it originating in the Kingdom of Chu during the Warring States Period (475-221 B.C.) was unearthed in Anhui province.
Because China does not produce much gold, its value has always been high. Copper, iron and silver were usually preferred for coins, while gold was used for jewelry. The Kuan-tzu notes that, "Emperors collect jade; nobility collects gold."
As foreign trade developed during the period between the Han and Tang dynasties, gold from the West found its way into China. After the introduction of Buddhism into China, gold was widely used to make religious images. In recent times gold coins have occasionally been issued on commemorative occasions.
In the West, however, gold has been more readily available and gold coins have been in popular use since their first appearance in what is now Turkey. Gold is not generally circulated today, although many currencies are still gold-based. This system began in 1916 with the British pound and was later taken up by the United States, France, Germany, Italy, Sweden, Norway, Denmark, Japan and Russia.
During the First World War, military expenses exceeded the amount of gold in reserve and many countries became indebted to the U.S. This together with large new discoveries of gold in America, made the U.S. dollar the strongest currency. The dollar kept its honored position until the 1950s, when such factors as the Korean and Vietnam Wars, and the rehabilitation of the European and Japanese economies, caused an outflow of U.S. dollars.
In 1971, US president Richard Nixon took the U.S. dollar off the gold standard. Since then, the price of gold has been volatile.
When the world's largest producers of gold, the Republic of South Africa and Soviet Russia sell the metal, the price goes down. When there are natural disasters or wars, the price of gold often goes up because of panic buying.
Gold's value is also influenced by other factors. When interest rates rise, people tend to save more, which causes the price of gold to go down. When international syndicates buy large quantities of gold or stock market shares, or when the real estate industry is depressed, the price of gold goes up.
A jewelry store owner says that when the price of gold goes up, there are more customers. "This is an example of opportunism," explains Liu Tai-ying, chief of the Taiwan Economic Research Institute. "It is just like crowd psychology: when the price drops people think it will keep on dropping, so they wait; when the price goes up people think it will keep rising, so they speculate on that hope and buy."
Other reasons for the price of gold rising include inflation, currency devaluation and the "drying up" of gold mines. So it's not surprising that an ounce of gold worth NT$2,000 10 years ago costs NT$20,000 today.
In the early years of the Republic, the Chinese currency was silver-based and even today when there is a shortage of gold, people still refer to a "silver" shortage.
Although today few currencies are gold based, gold can still perform the functions of a currency. When the Communists overran the Chinese mainland, panic caused a capital outflow bringing about a serious devaluation of the currency. When the Central Government moved to Taiwan, the Central Bank of Shanghai sent a whole shipload of gold to Taiwan, which was used to support the New Taiwan Dollar. Says Liu Tai-ying: "If it wasn't for that shipload of gold, Taiwan's current economic prosperity would perhaps not have been assured."
Since moving to Taiwan, the government has strictly controlled the sale of gold, partly because of past experience and partly to stabilize the monetary system. There are now export restrictions, though imports of gold are freer. Ornamental gold may be freely bought and sold on the domestic market, though ingots may not. There is a flourishing black market in gold ingots, however, and a "gold lobby" is pushing for more liberalization of the domestic gold market.
Most of Taiwan's gold is imported, both privately and by the Central Trust of China, which supplies the jewelry stores. The present high ownership of gold in Taiwan can be attributed to two factors: modern China has experienced many disasters, which has given rise to a special trust in gold, and more important, the current economic prosperity on Taiwan has meant that people have funds available to purchase gold ornaments and jewelry.
[Picture Caption]
Left: An elegantly arranged display window at a jewelry store. Right: Goldsmiths in Taiwan have achieved a high artistic standard.
1-3: A large variety of decorative gold jewelry is available in Taiwan's jewelry stores. 4,5: Women have a special liking for gold and constitute the majority of customers.
1-3: Gold can be fashioned into rings, bracelets, chains, and pendants. 4: Gold is often given to a baby when it is one month old. 5: A glittering set of formal jewelry.
1: Gold charms used in temples. 2: A dragon is a lucky symbol to have on a pendant. 3: Auspicious words are often part of gold ornaments. 4: A set of gold jewelry. 5: Phoenix and dragon pendants. 6: There are all manners of designs of gold chains available.
1: A simple but elegant display case. 2: Everyone loves these cute little gold bricks. 3: Intricately carved gold bracelets.
Goldsmiths in Taiwan have achieved a high artistic standard.
A large variety of decorative gold jewelry is available in Taiwan's jewelry stores.
A large variety of decorative gold jewelry is available in Taiwan's jewelry stores.
A large variety of decorative gold jewelry is available in Taiwan's jewelry stores.
Women have a special liking for gold and constitute the majority of customers.
Women have a special liking for gold and constitute the majority of customers.
Gold can be fashioned into rings, bracelets, chains, and pendants.
Gold can be fashioned into rings, bracelets, chains, and pendants.
Gold can be fashioned into rings, bracelets, chains, and pendants.
Gold is often given to a baby when it is one month old.
A glittering set of formal jewelry.
Gold charms used in temples.
A dragon is a lucky symbol to have on a pendant.
Auspicious words are often part of gold ornaments.
Phoenix and dragon pendants.
There are all manners of designs of gold chains available.
A simple but elegant display case.
Everyone loves these cute little gold bricks.
Intricately carved gold bracelets.
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