12th Century
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1100

Gold price: £0.864 (17s.3½d) per troy ounce fine

Gold/silver ratio: 1:10.7 (Venice); 1:9 (London)

Annual production: ± 75,000 ounces


The Impact of the Crusades

Commercial exchange was greatly enhanced during the 12th century by the first three Crusades (the First Crusade established the kingdom of Jerusalem in 1099, the Second Crusade began in 1147 and drifted on until 1170, and the Third lasted from 1189-1192), bringing not just Crusaders themselves, but pilgrims and traders in their wake. Since Europe was short of gold, they paid largely in silver, thus helping end the silver 'famine' in the eastern Mediterranean. However, the Crusaders themselves soon bought up local gold coins and ultimately these became a source of gold for Europe; Venice remelted many of them when making its first gold ducats in the 13th century. The Crusaders also used local gold. The Knights Templar paid 100,000 bezants (over 14,000 ounces) for the island of Cyprus in 1192 and over 20,000 ounces as ransom to save a leading Crusader. Thus, the Crusades played a crucial role in re-establishing the flow of precious metals between east and west.


The rise of Venice

In 1104 Venice established her famous Arsenal, the greatest of all shipyards, to build the warships and galleys that would make the city a world marketplace for over five hundred years. For precious metals it was an event of supreme importance, for it was along her waterfront that the trade was to mature. Venice became the prime crossroads of gold and silver until the 16th century. Already it was the meeting place of merchants from east and west, doing business in the many silver pennies minted across Europe against the gold coins of Constantinople, or copies made at various mints in the Middle East. Venice offered the best guide to the gold/silver ratio; the relationship was already a matter of daily business.

 
Far horizons

In China, where gold was first legalised for circulation in 1091 BC, there was local gold output. The Jao Yuan mine in Shandong province was working by 1100 AD or earlier. Gold coins issued by provincial governors circulated and were used for payment of official salaries; fabrication of gold into leaf or thread was also controlled as being wasteful (in 1167 gold thread in clothing was banned). In South America, where the first Peruvian civilisation of Chavin made wonderful ornaments as far back as 1200 BC, the Chimu empire in Peru, beginning in 1150 AD, perfected lost wax casting, alloys, welding and plating.