With so much recent focus on the astonishing rise of Cryptocurrencies, it is past time to revisit a historical store of value that amid all the hoopla of technology and the cyber world has been somewhat ignored. But that has not stopped China and Russia from continuing to stockpile tons of the yellow metal. Do you suppose they know something that we don’t?

It’s becoming to look like 2018 is gold’s breakout year, as prices for the precious metal hit a new cycle high last week. Even with gold’s strong market reception in January, it comes as a puzzle why this yellow metal with a 5,000-year history of value and credibility is still received poorly by the average American. It is, for this reason, we unravel America’s reluctance on gold - and why they don’t quite “get it”.

Americans, for example, understand more about Bitcoin. In fact, some recent studies suggest that 30% of your average Joes would rather buy Bitcoin than the more traditional asset classes like stocks, bonds or gold. Obviously, what they do understand about the precious metal is some textbook history of its origins and its dependability in an economic past long ago as a safe haven that has always stood the test of time, war, crises, and inflation. But being a thing of the past, some even suggest that it has no place in a modernised, albeit Central Bank controlled economy. To make matters more complicated is the proliferation of gold derivatives from “paper gold”, ETF’s, certificates, and so on that add to its confusion. It is, for this reason, we will attempt to elucidate the role of gold in the past as well as illuminate its shimmer as an asset for the future.

First, let’s get that convoluted mystery cleared up on that disturbing disconnect between the prices of “physical” gold vis-a-vis the price of traded gold. When investors talk about the gold price, much of this is concerning “paper” gold contracts exchanged in Chicago, London or Hong Kong. These gold contracts are further traded on like stocks and bonds, where traders use it to speculate.

In reality, no “physical” gold is exchanged between the parties - they are just buying and selling highly leveraged paper assets. But for some distinct investors, those who genuinely understand the glint and shine of owning gold, they would rather not speculate on the price but funnel their funds into buying the real thing – physical gold bars [Read: China, Russia].

Part of the conundrum about investing in gold comes from the complex derivatives that are now offered. The easiest way to gain gold exposure is through the stock market – from those who invest in actual gold bullions or through gold mining companies. Of course, there are other issues to consider with gold mining stocks, being political risks and maintaining profitable production levels, but that would be a due diligence endeavour for yourself.

For those looking to acquire physical gold, one can do so through the SPDR’s Gold Shares (NYSE: GLD) ETF; an exchange-traded fund that merely holds gold. When investing in ETFs, it is important to pay attention to the NAV as sometimes the purchase price can exceed the NAV by a wide margin, especially when things are way too optimistic. It’s called the premium. And on the other side of the world, from the gold exchange markets from Dubai to Shanghai, one can also buy and sell physical gold assets based on the last traded price from these exchanges.

Gold is an attractive alternative, indeed against inflation, but not just that. Old school investing will always point to gold, but recent developments in the financial system, as well as current innovations in financial instruments, have likewise proven to be better bets against inflationary pressures. They can either come as hybrid insurance products, mutual funds linked to interest rates, and stocks that have a central banking feature like SNB. There are also inflation-protected securities like TIPS.

The bottom line, part of the complexity of gold as an investment not only stems from the complex derivatives it bore over its long history especially during the modern times – but also how it was regarded by investors and institutions. For all the ‘what ifs’ in the world, one can look back into history and look at Gold as a fortress of stability and strength that has proven itself over thousands of years, outdating any currency or asset class. In Gold we can still trust. And as it has for many years through different ages and civilisations - its time will come again soon.