July 14, 2017

There are few people in the world who know as much about gold, its history and its global appeal than Matthew Hart. Based in New York City, Hart is the author of the 2013 book Gold: The Race for the World's Most Seductive Metal, and also penned numerous investigative articles on gold for Vanity Fair and The Globe & Mail.

Writing the book took him overseas, traveling to Congo, Senegal and the hills of Mongolia to learn about gold's origin and practitioners.

His earlier book, Diamond: The History of a Cold-Blooded Love Affair, tracked the glamour, adventure, ruthlessness and even murderous nature of the diamond trade.

Muzeum spoke with Matthew Hart recently to learn more about the allure of gold and what drew him to write a book on it. If you've ever been curious about gold's impact and attraction, you won't want to miss this Q&A.

Matthew holds a dore bar of gold at a Senegal mill. These bars are around 85% pure gold

Muzeum: What interested you in gold so much you wrote a book about it?

Hart: I was a reporter in Toronto when Ontario’s fourth largest mining camp, Hemlo, was discovered in 1981. This major gold discovery was big for Canada and the Western hemisphere. As a reporter, what attracted me is the great story to tell from gold: sudden riches, intriguing characters, people taking chances. There was a lot of colour in the Hemlo story, and I was also attracted by the technical part of mining gold and the science behind it.

People are fanatical about finding gold and I wanted to learn how they can keep on searching inhospitable places based on this fierce belief in themselves. The upside is huge, of courses - if it all worked out, they would be super rich.

Muzeum: So what attracts the world to gold? Why gold, as opposed to other resources?

Hart: We like gold because it has a history. It’s already established as a valuable commodity. It has a longer history as a valuable object than any other in the world, and that’s probably because it is soft and easy to create with, work with. It's malleable and can be shaped into other objects and civilizations have been doing this for a long time.

The material was also bright and users found it be just as bright when they had gold for more than 20 years. Naturally, throughout history, the rich and powerful were known to have gold, compared to regular folks, and that definitely has something to do with its value.

Muzeum: And it seems gold always supplanted other metals, like silver, as the most valuable commodity throughout history.

Hart: Right, even though silver coins were a denomination used by rulers to pay armies, for example, along with gold. So what exploded the value of gold and what made it something to carry value down through history is its democratization. Gold moved away from just the ruling and priestly ruling classes and also into hands of common people. 

Gold converted from a luxury to a necessity. 


Muzeum: As a Toronto company, we're interested in Toronto's relationship to gold. In your book you discuss how Toronto's Barrick Gold Corp was a key player in the gold rush across the world. How so?

Hart: Barrick was led by financial genius Peter Munk who created what I describe in my book as a clever way of financing the purchase of gold mines. It's called forward selling.

This works when a miner contracts with a commercial bank to deliver an amount of gold at a later date. The commercial bank then borrows that amount of bullion from a central bank and sells it in the market at the spot price. The money then goes into an interest-bearing account and when the miner delivers the promised gold, he gets the money and most of the interest. The commercial bank keeps a share of the interest and returns the gold to the central bank, with a small amount of interest.

Forward selling is now quite common but Barrick was the first to really launch it successfully.

Muzeum: Where do you see gold going in the future?

Hart: You’ll find the monetary uses continue as they do now,  where investors buy gold as a hedge and protection against betting on currency movements.

We'll also see scientific and industrial uses take off, such as gold nanoparticles increasing the efficiency of solar panels. And look at how gold nanoparticles may also be helpful to boost certain cancer therapies.  

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