The value of gold

Gold hallmarks

The British hallmarking system is one of the oldest and most trusted consumer protection systems in the world. It has existed since 1300 AD. Today, The HALLMARKING ACT 1973 (amended 1998) is law in the UK. Hallmarking involves the testing (assay) of precious metal jewellery or objects and then marking them to indicate that they are of a minimum standard of quality. A hallmark means that an item has been individually tested by an assay office and guarantees that it conforms to a specified legal standard of purity

Today, hallmarking takes place in the UK in OFFICIAL ASSAY OFFICES in London, Birmingham, Sheffield and Edinburgh. The hallmark is a stamp or punch mark which is applied to the item after test by assay. No article or part of an article is allowed to be marked unless it is first assayed and found to be of the standard of quality required by law. The British hallmark is accepted internationally as a guarantee of quality.

A complete hallmark consists of three compulsary punch marks:

The sponsor's or maker's mark

This consists of the initials of the person or the firm that either made the item or commissioned it to be made. Its main purpose is to identify the person responsible for making or importing the item.

The metal and fineness (purity) mark

This guarantees that the quality of the item is not below the legal standard indicated by the mark. The precious metal content of the article is expressed as a millesimal number. For example, the number .375 means that the metal is 37.5 percent pure gold (equivalent to 9 carat gold).

The assay office mark

This is generally based on the arms of the city. The London mark is a leopard's head, Birmingham is an anchor, Sheffield is a rose, and Edinburgh is a castle.

Please see below for visual examples

gold metal grades chart

Note - There is now an additional date letter optional punch mark used in many cases. A letter of the alphabet denotes the year in which an item is assayed and stamped. This letter is changed annually, as is the style and surrounding shield type.

History of gold

One reason why gold is so revered throughout the world is that it has such an incredible history. From the ancient Egyptians to James Bond, from Homer’s ‘Odyssey’ to the Californian gold rush, gold has played a fascinating part in world history and culture for thousands of years.

From the first discoveries of gold in ancient times, its beauty and the ease with which it could be worked have inspired craftsmen to use it to create ornaments, not just for adornment, but as potent symbols of wealth and power. The first pure gold coins were struck by King Croesus of Lydia (present-day Turkey) during his reign between 560 and 547 BC and gold coins have continued as legal tender since that time.

Mine production

It is known that the Egyptians mined gold before 2000 BC, and the first coin containing gold was struck in the eighth century BC.

The best estimates available suggest that the total volume of gold mined over history is approximately 158,000 tonnes, of which around 65% has been mined since 1950. Production has been on a downward trend since 2001, due principally to the reduction in exploration budgets that accompanied the low gold price of the late 1990s and the consequent fall in the number of major new gold discoveries. Independent analysts believe mine output will remain relatively flat for the next few years.

Gold as a reserve asset

Central banks have been major holders of gold for more than 100 years and are expected to retain large stocks in future. They currently account for about 20% of above-ground stocks. The process of rebalancing reserve portfolios to adjust to changing conditions since the demise of the gold standard has led to a reduction in the amount of gold held by some central banks in the past 10 years. This process may continue for some years to come. But the central banks have affirmed that gold will remain an important reserve asset for the foreseeable future and, importantly, since 1999 have accepted that sales be governed by international agreement.