BY JOHN ELLIS, FINANCIAL ADVISOR
We have been fascinated by gold for millennia. As far back as ancient Egypt, people saw the metal as the flesh of the gods and used it for jewellery, ornaments, and symbols of power. Today gold continues to remain a universal sign of wealth and security across the world.
Over time gold evolved from a mere symbol into actual money. Around 600BC in Turkey, the first standardised gold and silver coins appeared, making trade much easier in the marketplace. In the 18th century Britain adopted the gold standard. It fixed the pound’s value to a set amount of gold. As the world’s leading power, it influenced others and by the1900s most major economies used the gold standard.
But the system had limits. During World War I when the Great Depression governments needed flexibility to print money and stimulate economies. The gold standard was felt to be too rigid, so many countries abandoned it in the 1930s. The United States adjusted its gold price from about $21 to $35 an ounce in 1934 to boost its economy thereby drawing in huge amounts of gold from abroad.
After World War II, the 1944 Bretton Woods agreement tied currencies to the US dollar, which was linked to gold at $35 pan ounce. It worked for a while, but by the 1970s the US had printed far more dollars than its gold reserves could support. The system collapsed in 1971, ushering in today’s world of currencies backed only by trust in governments and not physical assets.
Still, gold’s appeal endures. It is scarce, durable, easy to carry and does not corrode. Today investors prize it for preserving wealth and diversifying portfolios. Unlike shares or bonds, gold produces no income but the fact you can hold it offers comfort in uncertain times.
Gold often shines as a safe-haven asset, rising when stocks fall or crises loom. Its price reacts to factors like interest rates (lower rates make gold more attractive), inflation, geopolitical tensions, and Central Bank actions. Putting all your money into gold alone is risky, as its value swings with global events. Most experts recommend it as part of a balanced portfolio, thanks to its historically low sometimes negative link to stock markets.
In recent years gold has stolen the spotlight. The rally started after Russia’s invasion of Ukraine in 2022, driving Central Banks, especially in China, India, Turkey and Poland, to buy heavily. Many sought to reduce reliance on the US dollar after Western sanctions froze Russian reserves. Purchases in the three years following the invasion have doubled those of the previous decade.
By 2025, gold smashed records. It crossed €3,000 pan ounce early that year, then surged past €4,000 in October, standing at €4,100 at time of writing, amid ongoing conflicts, a weakening dollar and falling interest rates. Central Banks kept buying, and everyday investors joined in drawn by the momentum.
As 2026 begins, gold hovers around €4,500–€4,700 an ounce, still reflecting strong demand from central banks and investors wary of inflation and global tensions. Whether the rally continues depends on world events but gold’s long history suggests it will keep its shine when others falter.
Why consider gold now? It adds balance to investments, often moving differently from shares and bonds. In volatile times, a modest allocation can steady returns and protect against big drops, a timeless quality for the world’s oldest asset.
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