This video delves into the history, properties, and uses of gold, as well as its role as a store of value and asset in modern times.
Gold: Man’s Obsession for Six Thousand Years

Gold, a rare yellow metal, has fascinated mankind for thousands of years. Its captivating beauty has made it an object of desire since ancient times. From coins and bars to jewelry and dentistry, gold has been used for a variety of purposes throughout history. In the first part of this journey, we took a closer look at the history of gold, explained the complexities of refining and casting gold and demonstrated its importance as money. In the second and final part, we will delve deeper into understanding the difference in attitudes toward gold in the East and West, explore the possible future of gold, and debunk the idea of gold as a boring asset with low returns.

The East-West Divide

The value of gold is perceived differently in the East and West. In the East, particularly Asia, gold has a much more cultural and spiritual value as compared to the West. It is believed to bring good luck, wealth, and prosperity. In the West, gold is considered a symbol of wealth and prestige. A gold watch, car or jewelry, flaunted by the rich and famous, is a clear display of opulence. While the East has a long-standing tradition of buying and holding physical gold, the West relies more on financial products such as gold ETFs. These fundamental differences in attitudes towards gold have a profound impact on the global demand for gold.

ETFs Vs. Physical Gold

Investing in gold can be done in two ways. One is holding physical gold like coins or bars and the other is investing in financial products like gold ETFs. An ETF, or exchange-traded fund, is a security that tracks the price of an underlying asset, in this case, gold. ETFs are treated like equities and can be bought or sold like a stock. However, investing in gold ETFs does not mean holding physical gold. It is essential to understand that ETFs track the price of gold and are not a substitute for owning physical gold. The price of gold and the price of gold ETFs may differ significantly for various reasons, including market speculation and manipulation.

Manipulation of Gold Prices

One of the most controversial topics in the gold market is price manipulation. Gold prices are regularly determined in London, the world’s largest physical gold market. The London Bullion Market Association (LBMA) publishes the benchmark gold price, which is derived from the trades of five LBMA members. These members trade gold over the counter (OTC), meaning there are no electronic exchanges, and the market is not transparent. This creates an opportunity for market players to influence the gold price. Due to the opaque nature of the gold market, it is challenging to prove manipulations, but reports of price manipulation do exist.

Gold: Not a Boring Asset

Critics of gold often argue that it is a dull and uneventful investment that provides minimal returns. However, the reality is quite different. Gold is not an investment; it is money. It is a safe haven asset by virtue of its elemental stability and does not carry any counterparty risk. In a portfolio, gold plays a unique role as a hedging tool against economic and geopolitical uncertainties. Unlike other financial assets, gold is not subject to default or bankruptcy. It is an asset that has stood the test of time and retains its value even in times of economic upheaval.

Possible Future of Gold

The future of gold seems to be inextricably linked to that of cryptocurrencies. Bitcoin, the most popular cryptocurrency, has been dubbed as the new gold. Bitcoin and gold share a few similarities, such as limited supply and their use as a store of value. However, gold is tangible, whereas Bitcoin is a digital asset. The increasing adoption of blockchain technology has facilitated the digitization of gold, giving rise to a new class of digital assets called stablecoins, which are backed by physical commodities such as gold. The evolution of gold as a cryptocurrency could bring new opportunities and challenges to the gold market.

Conclusion

Gold has been a source of fascination for mankind for thousands of years. Its beauty and rarity have made it a symbol of wealth and prosperity. Its value varies across cultures and regions, but it remains an essential asset for investors seeking protection against inflation, economic turmoil, and geopolitical uncertainties. Gold is not a boring asset but a stable store of value that has stood the test of time. With the increasing adoption of digital assets, the future of gold seems to be evolving, but its elemental qualities remain unchanged. Whatever the future holds, gold’s allure as an object of desire will continue to captivate and intrigue people for many more years to come.