It is the 79th element on the Periodic Table, and it has existed for hundreds of millions of years. It was formed in the stars when giant supernovas came together in monstrously powerful collisions. 1
Gold is plentiful at the earth’s molten hot core, or what National Geographic calls a “furnace of the geothermal gradient”2 but rare in the more accessible crust of our planet. According to researchers at the University of Bristol, the gold reserves we can reach were likely the result of a “bombardment of meteorites more than 200 million years after Earth was formed.” 3
The National Mining Association charts gold’s use in culture, fashion, and adornment as far back as 4000 B.C. It cites Nubia, a gold-rich region along the Nile River in Egypt, as the first to use gold as a medium of exchange and trade in 1500 B.C.4 The rest is history, so to speak, as gold remained a store of value and payment system throughout antiquity.
Gold coinage was the centerpiece of the British financial system dating from the mid-17th century, while the international (classical) gold standard dates from 1870 to the outbreak of World War I. Great Britain officially ended the gold standard in 1931 followed by the United States in 1933, although after the Second World War, the U.S. dollar remained pegged to gold until 1973.
With this Rich History, Why Do So Few Americans own Gold?
Clearly gold has not been hiding, but it has been hidden from you. A recent Gallup poll confirms that 61% of Americans now own stock5. One in four Americans own bitcoin6 and 66% of Americans own a home,7 but how many Americans own physical gold? An LA Times op-ed estimates gold ownership in the U.S. to be between 2.5M and 25M or a paltry .75% to 7.5% of the current U.S. population. Actual gold ownership, they say, is shrouded in a long-standing “legacy of secrecy.”
“We have probably never known how many Americans owned gold. For most of America’s history, that question has either been close to irrelevant (through the 19th century, the vast majority of Americans could not afford to invest in any assets beyond those that kept them alive) or a non sequitur (from 1933 to 1975, it was not legal for Americans to own gold as an investment).”8
Part of the answer may be by design since gold is a private investment and while there are federal reporting requirements many consider gold to be an untraceable store of wealth. And while those who have it may not be talking, those who don’t have it — may not know how to get it.
Gold is universally considered to be a good long-term investment but acquiring physical gold is neither encouraged nor embraced by the financial community. Why is that?
First, many financial advisors are not familiar with the process of acquiring physical gold. Second, they’re not incentivized to sell precious metals unlike trading equities or managing a stock portfolio. And finally, for many wealth advisors, stock brokers and fiduciaries — holding gold simply falls outside of their wheelhouse. And this is a disservice to the millions of savers and retirees who could benefit from gold’s portfolio preserving qualities.
Paper Floats
Those who are not privy to gold’s enduring value are missing out on the most powerful element of its monetary appeal. While the Bretton Woods system firmly pegged the dollar to gold, soaring inflation and an impending gold run triggered “Nixon Shock” in 1971 which uncoupled the dollar from the precious metal, and created an unbacked, government issued fiat currency. Allowing the value of paper dollars to “float” and the US Treasury to continue to print, create, or digitally emulate money was a recipe for disaster from the start.
Simply stated, money printing leads to inflation and unsustainable debt. This not only weakens the buying power of currency, it undermines the value of the money you already have tucked away in the bank, a 401k, or a pension plan.
A recent warning from the Cato Institute states,
Rising US spending and debt in light of heightened political polarization and congressional budgetary gridlock raise concerns about the sustainability of government finances. The recent credit downgrade by Fitch Ratings and Moody’s Investors Service lowering its outlook on the US credit rating is a reflection of the nation’s concerning long‐term fiscal trajectory and poor fiscal governance. Without a political willingness to reduce the growth in old age benefit programs, the erosion of central bank independence to finance future spending represents a growing risk. 9
Suffice to say, holding dollars or paper money is fraught with uncertainty. This directly contrasts with the legacy of wealth, prosperity, and intrinsic value of gold.
There is no other modern investment that is embraced by central banks and the world’s leading monetary authorities to diversify reserves, protect against currency depreciation, provide a global inflation hedge, and defend monetary holdings against global conflict and civil unrest.
Tinderbox Times
Welcome to the here and now where geopolitical risk responds to gold and gold responds to geopolitical risk. For the first time in generations, war has returned to the Middle East and the European continent. Armed conflicts, trade wars, demonstrations, and political polarization now dominate the news cycle. This has increased demand for gold, particularly from the world’s central banks.
According to ING, the Dutch multinational banking and financial services corporation, central bank buying has fueled gold’s recent record-setting run and they expect that rally to continue.
“Gold has … been supported by strong central bank buying as reserve diversification and geopolitical concerns have pushed them to increase their allocation towards safe assets.”10
According to the World Gold Council, owning gold in 2024 is as compelling as ever in a world mired in volatility and calamity.
“Last year central banks placed great emphasis on gold’s value in crisis response, diversification attributes and store-of-value credentials. A few months into 2024 the world seems no less uncertain meaning those reasons for owning gold are as relevant as ever.”11
The world is clearly “no less uncertain.” As we entered the new year, The World Economic Forum cited “cracks in society” and “episodic upheaval.”12 The Carnegie Endowment for International Peace, which compiles a Global Protest Tracker, is now monitoring over 700 significant anti-government protests worldwide.13
According to Reuters, the number of American “preppers,” or those who believe in preparing for societal chaos has doubled in size since 2017 and now stands at some 20 million. And they’re a far more culturally diverse group than ever before in history. According to John Ramsey, a former Obama administration advisor, “The only real unifying denominator among preppers these days is people who are smart enough to be aware of what the world is like … and they have the gumption to do something about it.”14
With unfolding regional conflicts, intensifying wars, growing protests, political division, and increasing unrest at home and abroad, we’re in uncharted waters. And, there’s little doubt that gold is where the world turns for safety.
In Plain Sight
To many, however, gold is still a “secret investment,” a gleaming enigma shrouded in obscurity; but it is one that has been integral to the history of money and is well known to central banks, leading monetary authorities, and emerging markets like China, Poland, Turkey, and India.
According to the World Atlas, the amount of “siderophile elements” in the earth’s core could cover us “knee-deep” in gold.15 But since it’s estimated to be about 6,000 degrees, significantly hotter than the surface of the sun, any “Journey to the Center of the Earth” is solely reserved for in the world of fiction.
The fact that we can readily purchase pure gold minted coins and seamlessly transfer 99.5% pure gold into an IRS approved retirement account, seems to be a bit of a modern-day wonder. And it’s something that is very much “in plain sight” for the world’s millionaires, billionaires and overly well-to-do.
According to mining and metals analyst John McDonald,
“The world’s wealthiest rely not just on the value of this yellow metal, but also on its staying power. No matter what happens on a global scale, gold will hold its perceived worth and act as a reliably appreciating asset over the long term.” 16
Indeed, much has happened “on a global scale” throughout the course of our lives. Few of us came through the double-dip recession of the 1980’s, the fallout of the dot.com bubble, the Great Recession, or the Covid-19 shutdowns and lockdowns — unscathed.
Subsequently, millions of Americans turned to gold as a crisis hedge and a long-term store of value.
To quote French novelist, poet, and author of Journey to the Center of the Earth, “It is only when you suffer that you truly understand.”
Thor Metals Group has been helping Americans acquire gold for over 18 years, facilitating some $40 million in precious metals purchases. We want to help you protect your portfolio from the growing risks at home and abroad.
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