Gold: From Ancient Times to Modern Portfolios

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Often perceived as a mere luxury, gold is a multifaceted asset with a rich history and enduring appeal. This series uncovers the layers of this precious metal. From its storied history to its modern-day investment implications, we will explore the various facets of this precious metal. Join us as we uncover the reasons behind gold’s enduring appeal and its potential role in your investment journey today in this 4-part series.

Part I: Gold: More Than Just a Pretty Metal

A Glittering History

Gold, the shimmering metal that has captivated humanity for millennia, is far more than just a symbol of wealth and luxury. Its history is intertwined with the evolution of human civilization, shaping economies, cultures, and societies.

The famous phrase “Midas touch” originates from Greek mythology about King Midas, who supposedly had the ability to turn anything he touched into gold. This highlights gold’s long-standing association with wealth and prosperity.

Various civilizations, such as the Indus Valley, the Pharaohs of Egypt, the Chinese dynasties, and the Roman Empire, accumulated and hoarded gold as treasures. The rise of gold’s importance was primarily driven by basic demand and supply—gold was not as freely available compared to other resources, leading to its higher valuation.

Aureus (Coin) Portraying Emperor Nero - Blog on History of Gold by Windmill Capital — _{The Roman Empire, at the height of its influence, recognized gold’s value as a currency and a symbol of imperial might. The aureus, a gold coin bearing the image of Emperor Nero, is a prime example. These coins, minted in the 1st century CE, were not merely currency but works of art, showcasing the empire’s opulence and the emperor’s divine status.}

The Properties of Gold

Gold also had (and still has) certain properties that made its adoption convenient. It could be easily molded, stored, and transported. As human civilizations emerged in different parts of the world and societies moved away from the barter system, gold became a natural choice to serve as a standard of value.

Gold as a Medium of Exchange

Yuval Noah Harari, in his best-selling book “Sapiens,” notes that gold money first appeared in ancient Mesopotamia in the middle of the third millennium BC. Other civilizations quickly adopted this form of money due to its convenience and ability to be standardized. The vast Roman Empire left a lasting impact by minting its own gold and silver coins, which carried the seal of the Roman Empire.

The trust people had in these coins was such that “in the first century AD, Roman coins were an accepted medium of exchange in the markets of India, even though the closest Roman legion was thousands of kilometers away,” Harari adds.

Conclusion

Gold’s journey from ancient civilizations to modern economies highlights its enduring value and significance. In our next article, we will explore why gold bullion and coins were not allowed to be physically held by citizens of some countries and its emergence as a valuable component of a diversified investment portfolio.

Check out other articles in this series below.

Part II: The Rise & Fall of the Gold Standard

Part III: Gold – Stability in Uncertain Times

Part IV: Buying Gold After the 2024 Budget: Which Option is Best for You?

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Windmill Capital Team: Windmill Capital Private Limited is a SEBI registered research analyst (Regn. No. INH200007645) based in Bengaluru at No 51 Le Parc Richmonde, Richmond Road, Shanthala Nagar, Bangalore, Karnataka – 560025 creating Thematic & Quantamental curated stock/ETF portfolios. Data analysis is the heart and soul behind our portfolio construction & with 50+ offerings, we have something for everyone. CIN of the company is U74999KA2020PTC132398. For more information and disclosures, visit our disclosures page here.

Naveen K R

Senior Director, Windmill Capital | The content in this article is purely the author’s personal opinion and is for informational and educational purposes only. It should not be construed as professional financial advice and nor to be construed as an offer to buy /sell or the solicitation of an offer to buy / sell any security or financial products. The views and opinions stated in the content belong to the author. Windmill Capital Private Limited does not uphold nor promote any of the views / opinions. | Windmill Capital Private Limited is a SEBI registered research analyst (Regn. No. INH200007645)

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