The story of gold and silver over the last one thousand years is almost that of the millennium itself.

It embraces the building of nation-states, like England and France, as kings sought to control the minting of gold and silver coin to enhance their power... the growth of great trading cities such as Venice, Amsterdam and London . .and the discovery of the Americas which ushered in new dimension s of gold and silver production after 1500. That metal, in turn, increased the Rows to India and China, paying for the expansion of international trade. And ultimately the search for fresh sources of gold and silver prompted the opening up of new frontiers in Africa, Brazil, Siberia, California, Australia and Canada.

In the beginning, the Crusades of the 12th and 13th centuries, bringing pilgrims and traders in their wake, nourished the interchange of gold, which Europe lacked, and silver, which the cast always sought. The Fourth Crusade aided the rise of Venice after 1204 by paying the city 300,000 ounces of silver to build its invasion fleet. Once the Crusaders had also captured Constantinople - then the main, but small, gold market - coin from there was remelted into new Venetian gold ducats that became so widely accepted throughout the Mediterranean world for the next 400 years.

In tracking the metals through the millennium, it is astonishing how much statistical information is available, dug out by diligent historians with all the verve of a modern market analyst. Thus, the output of the main UK mints at London and Canterbury is available from 1 220; the two mint used 450,000 ounces of silver for sterling pennies between 1220 and 1222. Similarly, for 1344, in the first great gold boom of the millennium from new mines in Hungary, the mints of London, Bruges, Florence, Venice and Genoa coined between them 170,000 ounces, a record since Roman times and, probably, for all previous history.

Half the fascination of putting together these two booklets was to get on the trail of a young American academic, Earl J. Hamilton, who took his wife and baby daughter to Seville in the late 1920s and spent six years ferreting out precise details of gold and silver Rows from the Americas to Spain from 1521 (when imports began) until 1660, in all 540,417,107 ounces. Then there was K. N. Chaudhuri, who devoted much of his academic life to tracking over 200 million ounces of silver and nearly 700,000-ounce s of gold carried to India by the East India Company From 1600 to 1760. Consequently, it has been possible to make a rough 'scorecard' of precious metal to India for the last four hundred years.

Through it all, there are tales of political intrigue, such as Henry VIII debasing English coin (silver slipped briefly to 250 fine, compared with the usual sterling silver at 925 fine), or the 1810 Bullion Committee of the House of Commons charging that the Bank of England was printing too much paper money while cash payments in gold were suspended during the Napoleonic wars. Among political battles was that fought by the silver lobby in the Unit ed States from 1870 to 1896 to retain bimetallic coinage of silver and gold, which culminated in their defeat in the US presidential election of 1896.

The champions of the millennium have been Venice as the great market through 1500, and London since 1700; Mexico as the dominant silver producer for the last three hundred years; and India as the foremost consumer of both metals for at least seven hundred years. It is also tempting to nominate silver as the precious metal of the millennium because, for 900 years, it was the coinage for most people's daily use and then, in the 20th century, as coinage was phased out, it gained an entirely new lease of life as its natural properties of sensitivity to light and electrical and thermal conductivity made it indispensable in photography, electronics and industry. Silver goes into the new millennium with a broadly-based demand. Gold, meanwhile, has been less certain of its destiny, although the recent announcement of the five -year moratorium on European central bank sales has given the market-fresh confidence going into the millennium.

Millennium Milestones – Excerpts


The Worshipful Company of Goldsmiths in London received its first royal charter from Edward III.


ln France, Philip VI issued a new ecu gold coin which gained large circulation.


Total production by French mints has been put at 350,000 ounces, but this must include considerable recoinage.


Very large shipments of silver from Venice to the Black Sea port of Trebizond for onward transport to Armenia and Iran, also to Syria and Egypt from where it was sent to India and China. Thus, in a peak period of European silver output, India was already a key destination Venice had special galleys built for silver convoys.


ln England, Henry VII minted the first sovereign of O. 5 oz (1 5.55 grams) at 958 fine, valued at £ 1.00.


Moses Mocatta moved from Amsterdam to London, establishing the oldest member of today's London market (now Scotia-Mocatta). By the 1680s Mocatta was sending silver privately to India to pay for diamonds.


New discoveries in Brazil at Cuyaba in Matto Grosso and later at Itabira in Minas Gereas in 1720, at Goyaz in 1725 and on the Rio Sarare further west in 1734 kept up the level of output. As one area was worked out, another was found. Production fluctuated between 350,000 and 500,000 ounces annually. Britain was the major destination with up to 200,000 ounces a year being converted to guineas. Portuguese moydores also circulated widely in southern England. This regular flow of gold did much to get the gold standard firmly established.


The French Revolution triggered a major flow of gold coin and bars from Paris to London. The Bank of England opened accounts for Louis d'or coins. Over 100,000 ounces of French gold came into the Bank six months of the storming of the Bastille while, in 1791, over 400,000 ounces were smuggled from France, taking the Bank's total stocks to two million ounces.


The Bank of England's gold stocks, drained by war payments in gold to European allies, were clown to £1 million (235,000 ounces) against liabilities of £15.5 million. Gold was vanishing at £1 00, 000 a day. On Sunday 26th February 1797 cash payments in gold against banknotes were suspended. It was twenty-four years before notes could be freely redeemed for gold coin. The unofficial gold standard was in limbo.


World gold output was up to 4.4 m.oz, a completely new dimension. Ultimately, ten times as much gold was produced in the second half of the 19th century as in the first.


The London market took most of the Australian gold, and membership grew with Pixley & Haggard and Samuel Montagu as new brokers; .M. Rothschild took over the Royal refinery, Henry Raphael set up a new refinery (good delivery tatus in 1856) and Johnson Matthey were made acceptable assayers to the Bank of England.


On 12 September the first 'fixing', a held at Rothschild's in. London. The price was quoted for 995 fine 'good delivery', instead of standard gold of 916 fine, and although in sterling, reflected the sterling dollar rate in New York. The fix was £4. 18s.9d (£4.94), equal to the New York price of $20.67 per ounce.


In the aftermath of the 1929 Wall Street crash and the collapse of Credit Anstalt in Austria, strain on UK gold reserves at the old price was too great. Britain came off the gold standard, along with several other countries. Sterling devalued, creating a gold price between £5.50 and £6.34, although US price remained $20.67 per ounce. The collapse of the gold standard set off a gold hoarding rush of 100m.oz in the next five years, while high sterling price encouraged Indian dishoarding of 40 m.oz from 1931 to 1938.


With the depression, the silver price fell to 1s. ($0. 24) per ounce, the lowest in the millennium.


On 31 January Roosevelt set a new price of $35 per ounce. The US Assay Office bought all gold offered at that price, pushing US reserves from 90 m.oz to 364 m.oz by 1938, and to 650 m.oz in 1942.


The Silver Purchase Act in the US decreed silver would form 25% of official reserves, with the silver corning from domestic stocks and abroad. The price revived to 2s.4d ($0.63) with US Treasury as the only buyer, getting 390 m.oz in 1935. The London silver fix often stayed in session until the Treasury opened. China abandoned silver standard for paper money.


Record London fixing at $850 an ounce on 21 January ended an inflationary decade of oil price shocks, freezing of Iran 's assets and the soviet invasion of Afghanistan, which sent investors rushing for gold. Average London price for the year was $614.63.


With gold at S850, the silver price hit $49.45 (£21.65) on 21 January, giving a ratio of I: 17, the narrowest since 1875 (Hunt aimed for 1:5). Margin calls swamped Hunt; market swiftly collapsed to $10.89 (£4. 68) and by 1982, $4.90 (£2.85).


European currency, the Euro, launched, with new European Central Bank holding 15% of its reserves in gold. Bank of England announced sale of half of UK's gold stocks, but in September, 15 European central banks announced a five-year moratorium on new gold sales, giving the market much needed support and a price rally to end the millennium.