In the early 1500's, King Ferdinand of Spain laid down the priorities as his conquistadors set out for the New World. "Get gold," he told them, "Humanely if possible, but at all costs, get gold." A few years later in 1531, Francisco Pizarro invaded Peru and captured the ruler of the Incas, Atahualpa. As ransom, Atahualpa offered to fill the room in which he was imprisoned once with gold and twice with silver.  Over the next four months nearly eight tons of gold were accumulated but, in return, Pizarro baptized Atahualpa, and then promptly had him strangled in public. In order to ship the gold back to Spain, Pizarro had it melted down.

Europe's prime source of gold came from stealing from South America and because of this; relatively few of the ancient treasures remain. However, at the Museo del Oro in Bogota, Colombia, more than 10,000 items of Pre-Columbian jewelry and ornaments are preserved. The preserved jewels come from tombs. The ancient Egyptians equated gold with the sun, the giver of life, and reserved its use for pharaohs only. The amount of gold in Egyptian tombs indicated the importance of the person buried there. Although most Egyptian tombs were robbed centuries ago, perhaps the most famous of all was discovered by Howard carter in 1022. This was the tomb of King Tutankhamun who ruled Egypt in mid 1300 B.C. In the Middle Ages, alchemists attempted to use their magic to make gold from other metals. They believed that gold was a source of immortality and so it was used in medicine to fight old age and prolong life. The Chinese saw gold as the yang of the sun, with silver representing the moon's ying. To ensure a lifetime of good luck and happiness, Chinese and Indian brides wear jewelry of no less than 24-karat gold on their wedding day.

The legendary King Midas of Greece was said to have had the power to turn everything he touched into gold. Meanwhile, the Incas called gold the "sweat of the sun." In some cultures, gold is even eaten to cure such ailments as arthritis, ulcers and tuberculosis. Tutankhamun The boy-king of Egypt from 1361 to 1352 BC whose tomb, discovered by Howard Carter in 1922, preserved some of the greatest treasures of the Egyptian goldsmiths' craft. The king's body was encased in a coffin of solid gold sheet two millimetres thick, weighing over 90 kilos. The head of the mummy was shrouded in a great mask of beaten gold.

One sign of gold's lasting value is that it has been used as a currency for more than 5,000 years. It is perceived as permanent wealth as opposed to paper currency and is bought in large quantities during times of crisis. In that long history, gold has now arrived and is now golden, as the price of the precious metal has soared recently. Here's the skinny for gold buyers and sellers. Gold is so hot because of the global commodity boom. The prices of metals, which include, copper, steel, and gold, have all increased tremendously, along with prices of sugar, soybeans, oil, and natural gas. The growing industrial and consumer bases in China and India are in a four year global economic growth pattern, and the recovery of Japan has also increased demand.

Gold is undoubtedly an ancient commodity of value, and a safe haven for investors worried that their other monetary assets will lose value because of inflation or war.
Production of most of these commodities is increasing, but not rapidly enough to keep up with demand, or with perceived future demand. The root causes are rising prices because people are consuming more. But gold is extremely unique. The price of gold is growing even as there's actually less demand for it.
Unlike copper or platinum, it is not specifically an industrial metal. As London-based Virtual Metals notes in its biannual Yellow Book, which is full of fascinating details and charts, in 2005 the electronics industry accounted for about 8 percent of total gold demand. At 70%, the biggest source of gold demand in the year 2006 is for the production and consumption of jewelry and as the price has risen lately, people around the world have lost their taste for gold costume jewelry.

The Yellow Book distinguishes between investment jewelry and adornment jewelry. The two markets of investment and adornment jewelry are for the greater part equal size but they are very, very different. Women store wealth in gold in the Middle East and Asia. It for this reason that they are the primary markets for investment jewelry. According to the yellow Book, for women in the Middle East and Asia, gold jewelry functions as "a combination of insurance, pension and ready cash." Hence, these comparatively poorer consumers of gold jewelry are sensitive to tradition and big swings in price.  Case in point. Amrita Raj, a 25-year-old bride, was shopping for her wedding trousseau on a recent Saturday in New Delhi. There was a "wedding set" she would purchase that day, with its requisite gold necklace, matching earrings and two sets of bangles. For the sake of family honor, the new in-laws would also have to receive gold. Tradition says a "light set" is appropriate for the mother-in-law, plus a gold ring or a watch for the bridegroom, and earrings for a sister-in-law. "Without gold, it's not a wedding - at least not for Indians," Ms. Raj said. The desire to own gold is not limited to households in India or the Middle East, either. Adornment jewelry's core market is the First World, particularly North America and Europe.

The United States, the world's second-largest consumer of gold, is also the world's largest holder of gold reserves. The government has 8,134 tons secured in vaults, about $122 billion worth. The Federal Reserve and other major central banks renewed an agreement last year to severely restrict sales from their reserves, offering, in effect, a price support to gold. That price is not simply a matter of supply and demand, but of market psychology. Gold is bought by nervous investors when the dollar is weak and the economy is tentative. That is a big reason for gold's high price today.

Facts You Should Know - India and Gold in the Marketplace

India is the world's largest consumer of gold and drives world demand for the precious metal. Parents start buying gold jewelry at the birth of a daughter in preparation for the dowry she will need on her weeding day. Indians love gold and the yellow metal is associated with virtually every auspicious occasion, be it wedding, childbirth, new home says Hiroo mirchandani, India jewelry manager at the World gold council. In rural India, gold is a big status symbol where people measure wealth in terms of gold holdings on individuals. Last year India imported 825 tons of gold.This information is incredibly valuable because some of the fastest moving cash in the world has decided that gold is the place to be, at least for now. Hence, it is for all of these reasons, historical, the weak dollar, and more, the price of gold is rising. However, we must recognize, understand and appreciate that beyond the price tag, the pleasure gold gives is priceless.

Do you ever question why one piece of gold jewelry costs more than another piece that looks the same? There is a difference. These differences relate to the type of caratage of the gold used, the weight of the piece and how it has been made.

As a guide, the purer the gold, the more precious the piece is. Further, handmade, limited edition and designer pieces cost significantly more than mass-produced jewelry. However, with such broad range of styles and prices in the global market, everyone can experience the power of and be dazzled by gold, as it is truly a product for every price pocket.

So here's the rub. Armed with this knowledge there are more very important things you should know. Review the South Atlantic Auctions' Guide to Gold to learn more