17th Century
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1600

Gold price: £3.00 (£3.0s.0d) per troy ounce fine

Gold/silver ratio: 1:12 Annual

production: ± 230,000 ounces


1601 First voyage of English East India Company ships to the east heralded a major change in precious metal flows round Africa to China, India and Java (Indonesia).
1602 The United Dutch East India Company was founded in Amsterdam, which became the bullion, financial and trading emporium of Europe for the next century, taking the role previously filled by Genoa and Venice. Annual treasure fleets from Spain stocked up the Amsterdam market, from where gold and silver were distributed to London and the rest of Europe. The United Dutch East India Company itself became a major carrier of silver to the east, and in the east moved gold around between Sumatra, the Philippines and Japan (which all had some production) to China, Korea, Java and India. The Dutch also secured a foothold in the gold trade from the 'gold coast' of Africa, where they took over from the Portuguese. These gold supplies were important as imports to Spain from the Americas were declining (see box).
1604 Union of England and Scotland under James I led to joint coinage including a new unite gold coin of 0.322 oz (10 grams) valued at £1 at 916.6 fine; the angel coin remained at 990 fine, and valued at £0.50 (£0.10s.0d), but its weight was reduced, thus creating a new gold price of £3.38 (£3.7s.7½d) per troy ounce fine. The mint struck over 200,000 ounces of new coin in four years.
Official gold imports into Spain
(troy ounces)
1601-1610
378,213
1611-1620
284,720
1621-1630
125,063
1631-1640
38,866
1641-1650
49,800
1651-1660
15,078
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Total
891,740
 

Source: American Treasure and the Price Revolution in Spain 1501-1650 by Earl J. Hamilton
1611 Gold further revalued in London by reducing weight of coins, raising the price to £3.73 (£3.14s.7½d). This was an over-valuation of gold, so that it was brought to the mint for coining over the next twenty years; the mint struck 50,000 to 80,000 ounces of new coin annually, and 250,000 ounces in 1624. Since little silver was coined, this widened gold coin circulation in Britain, ultimately putting the country on an unofficial gold standard. The situation arose because the market price of silver was dominated by demand in China and India, which meant the mint price was not competitive.
1621 Dutch West India Company founded in Amsterdam to handle trade with the Caribbean and also with West Africa. The company established forts on the 'gold coast' of Africa and bought up most of the local gold output. Between 1623 and 1636 they imported over 310,000 ounces of gold dust to Amsterdam, an annual rate of nearly 24,000 ounces.
1626 English East India Company, finding difficulty in getting Spanish silver rials to ship, because of war between Spain and France, dispatched a mixed batch of gold coins (including some from North Africa) to India, and did so for the next two years. But no more than a few thousand ounces were sent.
1639 French engineer Pierre Blondeau perfected milling round the edge of coins to prevent clipping. Taking advantage of the new technique, Louis XIII of France instituted a complete recoinage the following year with milled-edge coins, including a newly designed Louis d'or of 0.21 oz (6.75 grams). Blondeau later worked for the royal mint in England, urging a complete recoinage, too, but it was not undertaken for many years.
1640 Export of gold from Japan to China aboard Dutch East India ships. Japan had produced gold since the 12th century, but the amount was not significant until the 16th century when it was used locally for taxes, tributes and ornate gifts. By the 17th century the Nanbu mine produced 25-30,000 ounces annually and export was permitted from 1640.
1650 Annual world output was around 275,000 ounces, mainly from the Americas (rich alluvial deposits were found in Colombia) and West Africa, where output was bought by Dutch, British and German trading companies and still went across the Sahara to the Mediterranean ports. The gold/silver ratio in Europe had widened to 1:14.5.
1661 The English East India company received a new charter from Charles II, confirming its exclusive trading rights. While they shipped mainly silver to the east, weak prices in India in the 1660s and 70s prompted them to send gold too (see box). The gold was minted into pagoda coins in Madras. The Dutch East India Company also moved over 200,000 ounces from Japan to Batavia and India in the 1670s.
East India Company gold to India
(troy ounces)
1660-1665
34,544
1666-1670
53,808
1671-1675
117,974
1676-1680
165,785
1681-1685
224,830
1686-1690
28,266
1691-1695
7,110
1696-1700
15,793
Source: The Trading World of Asia and the East India Company 1660-1760 by K. N. Chaudhuri
1663 The guinea, named after Guinea on Africa's 'gold coast', was first struck; it weighed 0.27oz (8.7 grams) at 916.6 fine with a nominal value of £1, which raised the fine gold price to £4.05 (£4.0s.10¾d).
1671 Moses Mocatta moved from Amsterdam to London establishing the oldest member of today's London market (now Scotia-Mocatta). He banked with Edward Backwell, one of the goldsmith-bankers making London a financial centre. Mocatta first sent gold to India in 1676, where the gold/silver ratio had reached 1:17, making it profitable. By 1680 the ratio narrowed, so less gold was shipped.
1680 The Espiritu Santo gold mine at Santa Cruz de Cana in Colombia opened; peak output possibly 100,000 ounces a year for a short period.
1694 The Bank of England founded and soon became a focus of gold holdings.
1696-9 The Great Recoinage in England accidentally shifted the balance of coins in circulation from silver to gold by over-valuing gold. The motive for the recoinage was the appalling state of silver coins, which were ancient (some coins were three hundred years old), clipped and often counterfeits. Speculation arose that when old coins were called in for new ones their value might be written down, so people traded silver coin for gold guineas ahead of time in 1695. The price of guineas rose to £1.50 instead of £1.00 (a fine gold price of £5.26 per ounce) attracting gold for coinage. The mint used 150,000 ounces in new guineas in 1695. When recoinage actually started, Parliament ordered the mint price for guineas down to £1.10 (22 shillings), but the coin remained over-valued, so new gold kept being brought to the mint. By contrast, once the recoinage of old silver (15 million ounces) was complete, no new silver came to the mint; it was more profitable to take the market price, bolstered by Indian demand. So bar silver and much new silver coin went east. By 1699 the total value of silver coin in circulation was less than that of gold; a reversal of the situation a decade earlier. England was moving to a gold standard by default.
1697 Significant gold discoveries at Ouro Preto gold camp north of Rio de Janiero in Brazil led to a gold rush. Initial output 25,000 ounces by 1699.
1699 Sir Isaac Newton became Master of the Mint in London.