GOLD INVESTING HANDBOOK FOR ASSET MANAGERS
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Throughout history, gold has played a vital role as a financial asset in the global financial
system. It has been prevalent as a currency in many civilizations, including Ancient Greece,
Rome, and Egypt. In the modern era, gold continues to play a critical role in the global
financial system, serving as a hedge against inflation, a safe haven asset, and a reserve
asset for central banks.
In the 20th century, how gold was used in financial systems underwent significant changes.
The gold standard, which tied the value of paper currency to the price of gold, prevailed until
the 1930s, when it was abandoned by most major countries due to the Great Depression.
However, the gold standard remained a critical part of the international monetary system until
1971, when the US government ended its convertibility to gold.
In recent years, gold has regained its importance as a financial asset, with many investors
using it as a hedge against inflation and market volatility. In addition, central banks and other
financial institutions continue to hold significant amounts of gold as part of their reserve assets.
The role of gold as a reserve asset for central banks has been a significant driver of demand
for the precious metal. Gold is also considered a safe haven asset during times of economic
uncertainty and geopolitical turmoil, making it a popular among investors looking to hedge
against market volatility.
In addition to its role as a reserve asset, gold is a widely traded commodity in financial
markets. Gold futures and options are actively traded on commodity exchanges, providing
investors with a range of investment opportunities. Gold is also used in the production of
various industrial and consumer products, including electronics, jewelry, and medical devices.
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