An unprecedented discovery of more than 2,000 gold coins off the north-central coast of Israel might be part of the largest gold hoard ever found in the eastern Mediterranean, according to archaeologists.

The coins are identified as dinars, the official currency of the Fatimid caliphate that ruled much of the Mediterranean from A.D. 909 to 1171.

The find was made by accident in early February, when a team of six sport divers spotted what they initially thought were a few toy coins on the seabed near the ancient harbor of Caesarea. After realizing the significance of the find, they immediately notified the Israel Antiquities Authority (IAA). Divers from the IAA's Marine Archaeology Unit accompanied the group back to the site and were stunned at what they found.

"We were told [that the divers] had found about 30 or 40 coins," says Jakob (Koby) Sharvit, director of the Marine Archaeology Unit. "Usually that means you've found a hoard. So we went back and performed a small excavation. After two hours, we had found something like one thousand coins.

"We were shocked," he recalls. "We were so incredibly excited, but when you're underwater, you can't talk to each other. It was only when we surfaced and pulled out our regulators that we could scream with happiness."

But that was just the beginning: Another thousand coins were recovered from the site just this Tuesday, which already makes the find at least five times as large as what has until now been considered the largest known gold coin hoard ever found in the country—a cache of 376 Fatimid dinars discovered in the city of Ramle in the early 1960s—and possibly the largest cache of gold coins ever reported in the eastern Mediterranean.

A Fistful of Dinars

Though the discovery of gold always captures the imagination, it's the historical value of the cache that has researchers dazzled.

Fatimid dinars feature the names of the caliphs they were minted under, as well as the date and location where they were minted. "They're first-class historical documents," explains Robert Kool, curator of the IAA's Coin Department.

At its height in the mid-tenth to mid-eleventh centuries A.D., Fatimid rule stretched across North Africa and Sicily to the Levant, with trade ties that extended all the way to China. From its capital in Cairo, the caliphate controlled access to gold from sources in West Africa to the Mediterranean, and the currency crafted from the precious metal conveyed the Fatimids' formidable power and wealth.

A cursory study reveals that the earliest coin from the hoard was minted in Palermo, Sicily, while the majority came from official Fatimid mints in Egypt and other parts of North Africa and date to the reigns of Caliphs al-Hakim (A.D. 996-1021) and his son al-Zahir (A.D. 1021-1036). The coins are of two different denominations—whole dinars and quarter dinars—and are of various weights and sizes. Initial tests indicate that they are 24-karat gold with a purity of upwards of 95 percent.

"The amount of currency minted under the Fatimids is truly staggering," says Kool, who notes that as late as 1120 the caliphate's treasury was said to hold around 12 million dinars. "It was truly a monetary society. People got paid."

Thanks to detailed historical accounts and treasure troves of contemporary documents, we know how much people were paid at the time. The average monthly wage of an unskilled worker was around one dinar a month, according to Kool.

Some of the recovered coins appear to be in "mint" condition, but others had obviously been in circulation for some time. Several of the coins show tooth marks, where skeptical merchants employed a "bite test" to assess the authenticity of properly pure Fatimid gold.

Questions, Excavation, and Answers

Now researchers must figure out why such a large amount of currency was found on the seafloor so far off the coast. Sharvit is confident that the hoard is from a shipwreck and suggests several scenarios, including that the coins belong to a merchant ship or may be associated with a tax payment on its way to Cairo. (Read more about shipwrecks.)

Based on the lack of small denominations or even clippings of coins that would be used for average transactions, Kool agrees that the cache was serving an official purpose: "This was no day-to-day money."

The area in the harbor where the coins were found has been declared a closed excavation area, and Sharvit's team plans to return to the site after an incoming storm passes through, possibly early next week. Ironically, it is believed that an earlier storm exposed the cache in the first place.

Meanwhile, researchers at the IAA will have their hands full with studying the thousands of coins already recovered. "They've got a good find there," says Michael L. Bates, curator emeritus of Islamic coins at the American Numismatic Society, who notes that a hoard of this size can provide unusual insight into many aspects of the economy, including the systems of coin production, the distribution of coins in circulation at the time, and how long they stayed in circulation.

"Heart of Gold"

Authorities are quick to point out that the sport divers who first reported the discovery deserve the highest praise, not just from the scientific community but also from the public in general. Even though under Israeli law all antiquities found in the country belong to the state, and removing, selling, or failing to report a find can be punished with up to five years in jail, looting of archaeological sites remains a significant problem.

"[The divers] discovered the gold and have a heart of gold that loves the country and its history," says Sharvit.