The Definitive Guide to Understanding Gold's Timeless Value

The
Definitive
Guide to
Gold
I TS V A LU E T H R O U G H H I STO R Y
A N D W H AT I T M E A N S TO T H E
MODERN INVESTOR.
BROUGHT TO YOU BY NOVEM

“Gold is money,
everything else is credit.”
JP MORGAN
N O V E M The definitive guide to gold 2

INTRO
An investment like
no other
Gold is an investment unlike any other in modern
history. It retains value not only over the course
of one’s life but intergenerationally. The value of
gold has ups and downs depending on the strength “Gold is literally in
of the global economy - with gold typically
strengthening in value during times of economic our blood — our
uncertainty - but unlike other investments, gold will
never completely lose its value.
bodies contain
0.2 milligrams of
Gold has held extant value for humans for over
7,000 years - and will likely remain so over the next it, mostly in our
1,000 years. No other stock, bond, or commodity
has a comparable or foreseeable endurance to
blood.”
retain value and it is a safe bet that gold will remain
a valuable commodity. It is the closest concrete SOURCE
expression we have to the idea of “value”.
While currency itself is an invention of humankind,

gold is as close to the core of the abstract concept
of currency as any single commodity. It is not hard
to see why gold has a legendary appeal, a spotted
history of humans building and destroying
civilizations to attain it and a definite allure for
the diversified investor to this day. As human
technology has evolved from papyrus and pottery
to smartphones and blockchain, gold has always
been and will always be everlastingly valuable.
The history of gold is the history of currency; the

history of currency is tantamount to the history
of society as we know it. The idea to abstractly
represent and value wealth in a way that creates
stability and easily enables transactions is one
of the wonders of the modern world, without
which global trade, or even national trade would
be impossible.

SECTION 01.
The value of gold

Gold is widely known as one of the most sought after
precious metals, but why is gold inherently valuable
and how did gold gain and maintain its status?
Its timeless appeal and humanity’s long historical

relationship with gold are contributing factors to the
enduring value of gold, and its success as an asset
and means of exchange.
N O V E M The definitive guide to gold

01. THE VALUE OF GOLD
Why do we buy gold?

Traditionally people trust gold, seeing it as a It is seen as a safe haven, possibly because its
store of value – especially in uncertain times performance in the market tends to be
or as a hedge against inflation of a weakening predictable. For example, when the US Dollar
dollar. or the stock market drops, when inflation is high,
or when it is a low-interest-rate environment,
Gold has been used historically to barter for investors tend to purchase gold and/or gold prices
goods, and so it has a historical element to it tend to rise. This is a reflection of how investors
that makes us use it to denote value. see gold as a good option for preserving wealth in
uncertain times.
“Gold has been discovered on every continent on Earth.”

SOURCE
Gold always has value

Gold has always been valuable in that its value While gold is perceived as a stable store of value,
has never reached zero. In fact, it is probably the gold price reflects supply and demand, and
one of the most sought after of all the precious the price can fluctuate like any commodity. For
metals in existence. example, gold coins might retain near full value
even when there is political instability or when it is
The value of gold could be said to be moved and used across national borders.
multidimensional. First, gold is perceived
to be a stable store of value. However, gold Gold has a universal, international appeal that is
as a physical element also offers immediate sustained to this day.
value; it is highly corrosion-resistant and easily
worked, so it has multiple applications from
jewellery and decorative purposes to
industrial applications.

01. THE VALUE OF GOLD
All currency is founded

upon belief
Some of gold’s value could come from the
belief factor. This means that because we
have faith in the value of gold – and in part due
to our trust in an external authority within our
economies – we collectively recognise it as a
reliable medium of exchange and indicator of
value, and so gold retains its value.
All currency is based on belief, and it’s believed

that the emotional attachment our historical
forebears have had to gold is a driving factor in
that belief.
Beyond the human belief in gold’s value, gold

has a few characteristics that separate it from
every other currency that has been tried. Gold’s
unique coloring and luster have fascinated
humans for centuries, which is why gold has
been so successful.
“All money is a
matter of belief.”
ADAM SMITH

SECTION 02.
The 3 characteristics
of gold’s success
Gold is historically humanity’s clear choice as the
eminent representation of wealth - but what makes
gold the best fit? Other precious metals like silver
could be and have been used to exchange wealth.
Spices and salt have been used as currency. What

makes gold “the winner” as the commodity most
closely associated with wealth? Gold’s success could
be said to be founded upon three key characteristics:
♦♦ Workability
♦♦ Immutability
♦♦ Duality
In addition, other key factors include the ability to

measure and validate gold, and the fact that it is not
easy to manipulate the price of gold.

02. THE 3 CHARACTERISTICS OF GOLD’S SUCCESS
Workability
Gold is considered a soft metal, and so it is highly workable and can be used for very fine work. It can
be alloyed with other metals – from silver and copper to zinc and titanium – to make it stronger, more
durable, and more suitable for other purposes such as jewellery.
Skill in minting gold

With a low melting point, gold is easier to mint and finally to the steam-powered and
and use as coinage than some other metals electrical-powered minting processes of modern
like titanium, zirconium, aluminium, and times - our ability to mint coins from precious and
iron. And while silver has similar properties semi-precious metals has greatly advanced.
that make it almost suitable for minting, it
tarnishes, unlike gold. Gold rates at 2.3 on a hardness scale of 10.
The human advances in coin-minting As a very soft metal, gold is very malleable and can
technologies, including gold coins, might be a be pounded, twisted, rolled, and shaped into a
contributing factor to gold’s success. From the huge variety of forms without breaking apart. Gold
handheld dies of the Middle Ages to the first has chemical and physical properties that make it
mechanised minting processes in the 1660s, ideal for serving as currency.
Uncommon uses for gold

Gold can even be pounded into sheets so that it becomes translucent yet still remain intact. These
sheets of gold allow some sunlight to pass through while reflecting infrared rays, which is why some
skyscrapers use gold in their glass windows to assist with cooling.
Gold is similarly used in satellites and astronaut helmets to reflect infrared rays in space.

Gold used in
technology and
electronics More gold is re-
coverable from a
tonne of personal
Gold is also highly workable because it is
extremely ductile, and can be shaped into computers than
wire or threadlike forms without developing
brittleness or breaking. And although gold is
from 17 tonnes of
not magnetic, it is an excellent conductor of gold ore.
electricity. This makes it extremely valuable
for sectors like the electronics industry in
applications like circuits. SOURCE
Gold used as
medicine
Gold is even used in medicine. Gold powder,
gold dust, or gold salts have been used for
years to treat conditions like rheumatoid
arthritis.
For health-related applications gold was used

as far back as 4,500 years ago, when the
ancient Egyptians used gold for dental work
and other purposes. In modern times, gold has
been used in aurotherapy or chrysotherapy
(use of gold salts to treat rheumatoid arthritis)
since the early 1900s.
Gold’s use in medicine is likely due to its

purity and hence inert status when used in
the human body. Its biocompatibility with the
human body, along with its potential anti-
inflammatory and antimicrobial properties,
means it has been widely used in health fields
ranging from dentistry to medicine.

Immutability
Gold is one of the most non-reactive of all metals, and so it remains benign in all environments, giving it
a level of immutability that is rare.
These special physical properties, including its non-oxidising, non-corroding, and non-tarnishing
qualities, has been a contributing factor to the number of uses it has been mined for.
Gold endures where other

metals do not
While gold is a highly workable metal, it is not corroded or tarnished by moisture, and it does not oxidise
when exposed to water and oxygen. Gold is not affected by ordinary acids like other metals, which
makes it a durable and versatile metal for fine work like very small coins.
Another indicator of gold’s immutability is the fact that deposits of gold found in mountains, under
streambeds, and under the ocean remain unaffected until they are removed.
Scarcity and availability

Gold is still considered a very rare metal today, with less than 6.5 billion ounces of refined gold
estimated to be above ground.
Since gold is immutable and retains its value, old gold (largely in the form of jewellery, watches, and
ornaments) retains and increases in value, forming another part of the gold market.
Gold remains scarce, but still available enough for use. It is both scarce and available, which
characterises gold with an element of duality.

Duality Only so much

gold is coming
Gold is rare, especially when compared to
abundant metals like steel and aluminium,
however it could be said to be characterised
out of the earth
by duality due to its portability and relative
availability. Gold remains a relatively scarce precious
metal, and since the 16th century, the supply
For example, gold isn’t as rare as rhodium of gold coming out of the ground has been
and osmium, two of the rarest metals in the limited.
world. Gold is scarce, yet still in sufficient
quantities to serve its purposes (from medicine Currently, world production of gold is around
and health and storage of value to electronics 2,500 tonnes per year with reserves possibly
and jewellery), which could be driving both in the tens-of-thousands-of-tonnes range.
the demand and supply-side factors that have
equated to its success.
Measurement and
validation
Another gold’s success is the ability to simply and reliably measure and validate gold across
the world.
Weights, maths, and measures

The universal availability of weights and measures throughout gold’s history means parties using
gold for exchange and as a means to store value can easily measure and validate the gold, whether
it is in bullion or another form. For example, gold bars of different weights and sizes can be used
to carry out transactions or store value as required.

The means to measure and

sustain gold value have kept up
over time
Despite gold-related scams and attempts to counterfeit and clip gold (cutting bits of coins and
blocks of gold), the means to measure blocks, coins, and other units of gold is widely available.
Over time, this might have contributed to people’s trust in gold and gold’s success as a valuable
metal and asset.
The public trusts validation

People trust the available validations of gold, and, while weights and measures might have been
fine in the past, the purity of gold can now be checked in a number of ways. Acid tests, electronic
gold testers, and X-ray fluorescence spectrometers are just some of the ways jewellers and other
parties handling gold can validate its purity, and quickly.

It’s not
easy to 10 Year
Gold Price
manipulate in USD/oz
the price of
SOURCE
gold
It is not easy to manipulate gold prices over
the long term. While gold prices could be
subject to short-term manipulation, over the
long term, the evidence suggests that gold
prices are — for the most part — determined
by other factors.
Market forces and

market dynamics
Over the long term, gold prices are impacted Over time, the parties involved (such as central
by a number of factors, including: banks) that try to manipulate gold prices fail
because they will run out of physical gold or they
♦♦ The global money supply will face a change in inflation expectations. This
will lead to price surges that even governments
♦♦ US trade/debt imbalances cannot control.
♦♦ Central bank activities
♦♦ Interest rates, and Hence, gold prices tend to be resistant to
manipulation, which is another likely factor in
♦♦ Commodity prices (especially oil prices.) the success of this luminous commodity.

SECTION 03.
Infrastructure and the

minting of coins
One of the requirements to be a great nation, or
empire, is to have a universally recognized coin or
currency. That requires producing them consistently
on a large scale and distributing them globally - both
considerations were achieved with far more difficulty
1,000 years or more ago. However, the ability to
achieve global distribution of a recognized monetary
system was something of a hallmark of success for a
nation because of what it says about the capabilities
of that nation.
Minting gold coins – and using them as a means

of exchange – requires a level of infrastructure.
Countries or governments that want to use gold
coins need to be able to produce them on a
consistent basis. Coinage can be used to brand a
nation, act as an indicator of its stability, showcase
a track record of success, and make it easier to trade
with that country.

03. INFRASTRUCTURE AND MINTING COINS
Empires were
built on their
capacity to
mint coins
In ancient and medieval times, metal casting Like most coins during this period, denarii
and smithing were critical elements in were composed of gold, silver, and bronze,
minting infrastructure. but a gold aureus piece was worth 25 silver
denarius pieces.
Artists, apprentices, and blacksmiths brought
important labour and skills to these pre- Today the minting process can be broken
modern minting systems. Ovens, hammers, down into six steps.
and dies for the coin imprints were essential
tools and equipment during these times. ♦♦ First, a large strip of metal is fed into a
blank press by hand.
For example, at the peak of the denarii
♦♦ Second, the blanks are washed and
currency, the ancient Romans had the
heated.
infrastructure to produce as many as 17 million
denarius (the standard Roman silver coin) ♦♦ Third, the ‘upsetting process’, a rim is
per year. raised on the edge of a coin.
The denarius in ancient Rome became the ♦♦ Fourth, the blanks then go through the
major currency in the central and western striking process to get stamped with a
Mediterranean. Reigning as one of the most design or inscription.
important coins in ancient Rome for almost ♦♦ Fifth, the coins are inspected for errors
500 years, the denarius is an example of a before being counted, and
successful currency with a strong track record
of success. ♦♦ Sixth, the coins are bagged for delivery.
By nature, currency generally needs to be uniform and standardised to facilitate trust and in order to
function as a currency. And with an established infrastructure, governments can usually produce coins
consistently at the required volumes.
An infrastructure that provides consistent weight and purity could also support higher levels of trust
in the currency and enable transactions.

03. INFRASTRUCTURE AND MINTING COINS
Branding of a nation
Some of the world’s earliest coins, like coins from Lydia in western Turkey over 2,500 years ago, feature
symbols of royalty like lions and bulls. From the earliest times – as far back as the 6th century BC
– coins were used to brand nations and their leaders or elites, often by being struck with profiles of
royalty and leaders or other scenes displaying power.
From the ancient Romans to the ancient Chinese, different empires and dynasties made their mark on
their coinage and communicated their authority and power.
Therefore, coins in ancient times had a secondary function: they were used as channels or conduits
to broadcast the imagery of the ruling class, since coins were seen as the mass medium of the day.
In 46 BCE Julius
The stability of Caesar minted the
largest quantity
a nation of gold coins yet
seen in Rome.
Successful coinage could be said to
demonstrate and reflect the stability and reach SOURCE
of a nation. For example, Roman coinage was
successful in the sense that it became widely
accepted and held recognised value from
Africa to Europe.
The ease of exchange and transactions a

currency enabled were tied to the stability
and recognition of the authority of its issuing
government.

SECTION 04.
The rise and fall

of empires
The use of gold and other types of currency could
be seen as being closely linked to the rise and fall of
empires. Currency - the universal means of exchange
- are vital enablers of the highly complex systems
that are characteristic of empires.
Due to a currency’s essential role in economies, its

poor management could contribute to the rise or
collapse of empires.

04. THE RISE AND FALL OF EMPIRES
Currency bankrolls
bureaucracy, projects,
and expansion
Gold and other types of currency could be said to facilitate trade in a number of ways. For example,
trade – and the currency that enables trade – was central to the rise of ancient Rome.
Currency, or a recognised means of exchange, allowed a variety of goods to be imported into Roman
borders. Goods like grains, marbles, timber, iron, spices, salt, and silver could be used to support
projects and expansion.
The Roman bureaucracy – administrative, logistical, and military arms – grew to support the vast
wealth and economic activity of the citizens of Rome.
The Marcus Aurelius

distributing bread
government, to the poor
rule of law,
and the
strength
of the state
The legitimacy of official currency is, by logic, dependent on the government, rule of law, and the
strength of the state because it is issued by the state. For example, Babylon grew into one of the
largest cities in the ancient world under Amorite King Hammurabi. The city became a major military
power under this king, and he eventually created the Babylonia empire (not Babylonian empire).
Though short-lived, the Babylonia had one of Without a functioning government as evident in
the world’s earliest and most complete written the rule of law and the strength of the state, it’s
legal codes, and as early as 2000 BC (which possible that such a monetary system could never
was before Hammurabi’s reign) the city already be enforced.
had a sophisticated monetary and credit
system. Its dual monetary system used barley The symbiotic relationship between currency
and silver as legally sanctioned mediums of and government can also be seen in the Roman
exchange and standards of value. Empire. The Roman Empire minted millions of
gold coins in the two centuries leading to 400 AD.
The Code of Hammurabi set out “grain They also used the silver denarius.
money” for certain types of payments and
metal money for other types of payments, and In the face of debasement, however, there was
imposed severe penalties on merchants who runaway inflation, which eventually led to raised
insisted on the wrong payment type. taxes and a paralysed economy. Ultimately, this
would contribute to a complete collapse of the
Babylonian temples also engaged in banking Roman empire, which will be explored in further
business by providing loans in silver and grain detail later.
and accepting deposits that accrued interest.
Gold provides a foundation

for civilization
Gold-based coinage and other types of currency were integrally linked to the rise and fall of
empires, because they provided a guaranteed, authorised, and widely accepted means of exchange.
This allowed parties to exchange value with ease, in contrast to the limitations associated with
barter systems.
Easy exchange of value in turn drives commerce as well as technology development on new and
bigger scales. From a basic currency in ancient times, banking systems continued to evolve to provide
new products that support civilisation as we know it.

The creation of banking

and lending
Banks have existed at least since the earliest currencies, and in the ancient times this was due to
the fact people needed somewhere to keep their money safe. Coins that were used for everyday
transactions, paying for foreign goods and services, and for paying tax needed to be kept in a safe
place. In ancient times, with homes lacking safes and other security tools, people kept bank accounts
at their temples.
This was true of ancient Greece, Rome, Egypt, and Babylon, where these temples also provided
lending services. These temples handled small and large loans, as well as loaning to sovereigns, whilst
money lenders provided other types of loans. It was the ancient Romans who set up banks as distinct
operations away from temples.

With banking comes credit

The issuing of credit (loans) at the cost of interest
soon arose with the creation of the first dedicated
banks in the ancient civilisations. The ancient
Romans, for example, allowed bankers to confiscate
The Code of
land in the face of payment defaults. Hammurabi
Later, European monarchs began taking loans from contained
royal treasuries, and this easy access to finance was lending laws
associated with unnecessary spending, including
on wars, that led to staggering debt.
From these early banks, the fractional reserve

system eventually arose. The banks of today by law
need to meet reserve requirements, which means
they are only required to hold a fraction of what is
deposited in their banks.
The fractional reserve system attempts to ensure

that banks have sufficient liquid assets in the
form of reserves to fulfil normal withdrawals and
transfers. It also means that modern banks create
money. This is because a deposit of $1,000 can be
used to lend $900 to other customers where the
required reserve ratio is 10%.
The rise and fall of empires could provide valuable instruction on how gold and other coinage
both facilitate and limit human civilisation. From the Roman and Byzantine Empires to Spain and
Greece, currency traces the stories behind empires.

Greece and Alexander the Great

Alexander the Great is best known for the creation of an enormous empire spreading from Greece
to India, but he is also a significant figure in the area of international currency.
When he took the throne in the aftermath of his father’s assassination, Alexander introduced the
Attic coinage standard. He circulated his own coins as he went on his military campaigns. In the
process he achieved a previously unknown level of uniformity in international coinage despite
his currency being struck in hundreds of different mints across Europe and Asia.
Alexander’s coins always featured the head of Heracles. The two dominant coins during Alexander’s
reign were the drachm and the tetradrachm, both silver-based coins. Alexander’s currency was
largely used to pay for military supplies, pay soldiers, pay one’s levies and taxes, and to use as
protection money for the barbarians, rather than to support trade and exchange.
Additionally, he minted vast numbers of coins so that he could use stolen Persian treasures
to fund his military efforts. This is in contrast to the currency of the other empires previously
discussed, whose coinage was focused on facilitating commerce.
Widely accepted, Alexander’s coinage was greatly popular throughout both the Greek and the
non-Greek worlds. After Alexander’s death and the fracturing of his former empire, the regions
throughout the old empire continued to mint coins using his name for the next 250 years and using
them for international trade.
The Roman
Empire
In addition to the largely silver-based denarius
as previously mentioned, the Roman Empire
used the gold-based aureus, the brass-based
sestertius and dupondius.
Greek-influenced territories accepted Roman

coinage even if they had their own currency.
SOURCE

Roman coins had intrinsic value as they contained precious metals. Romans had the advantage of
knowing about coinage systems before they introduced them in 300 BC, because the Greek world
had already been using coin-based currency for the past three centuries.
The double denarius would replace the denarius in the third century, when Diocletian undertook
monetary reform and created denominations such as the argenteus and the follis. This was worth
two times the denarius in face value, but had the weight of only 1.5 denarii.
When the effects of debasement finally materialised, the runaway inflation contributed to economic
standstill and collapse in the third century AD.
The Byzantine Empire

The powerful and enormous Byzantine Empire could be said to have originated around 330 AD,
when Roman emperor Constantine I declared there was a new Rome at the site of the ancient
Greek colony of Byzantium.
The Byzantine Empire survived for 1,000 years after the western half of the Roman Empire fell in 476
AD Rich with culture, art, and literature, the region was also a military buffer between Europe and
Asia.
Notably the Byzantine Empire continued the Roman tradition in coinage. Coins were used to pay
for goods and services and to pay taxes, and they were used to reinforce the image of rulers and
strengthen the allegiance of the people.
The gold solidus or nomisma was one of the most valuable coins and it would feature as part of
the Byzantine coinage for 700 years - before being replaced by the hyperpyron. Each Byzantine
emperor minted their own coins, and the value of coinage depended on the weight and purity of
the coin.
Along with the nomisma, the miliaresion was used. Due to debasement that lowered gold content,
the nomisma gradually lost value. That was until Emperor Alexios I Komnenos minted a new coin,
the “hyperpyron,” which was made of electrum (an alloy of gold and silver) and worth one-third the
value of the nomisma.
The hyperpyron coin survived debasements until the

Byzantine Empire fell in the 15th century.
Ferdinand and Isabella

In the years following King Ferdinand II of Aragon and Queen Isabella I of Castile’s marriage, the
Kingdoms of Castile and Aragon (Spain and Portugal) were in time ruled jointly. This meant their
currencies had to be adjusted.
Known as the reign of the Catholic Monarchs, the years from 1474 to 1504 was a time of immense
progress and wealth that put Spain at the forefront of Europe for over a century. They strengthened
the legal code, regained territories, and completed the reconquest of Spain.
With an expanding kingdom including the Canary Islands, the annexation of the Nazarí Kingdom of
Granada, and the voyages of Christopher Columbus in the New World, the empire needed a stable,
functioning, and above all unified monetary system.
Isabella and Ferdinand attempted to unify the coinage types, especially in Castile. They set a
standard for Castile in 1475 and this included the castellano, which featured facing busts of the two
monarchs. The 1475 standard also established the doble castellano, the real, and its divisors, the
medio real, and the cuarto de real.
What the Spanish Catholic Monarchs did well was to establish gold standards that were not
manipulated by the state for minting gold coin, the excelente de la granada, which was based
on the Venetian ducat. Their downfall wasn’t in coinage so much as they failed to invest in
governance and civilization where they looted gold, which lost them the war.
“Get gold, humanely if you can,

but at all hazards, get gold!”
KING FERDINAND

SECTION 05.
A historical timeline
of gold
From discovery to standardisation and its use in
modern times, humanity’s relationship with gold
has evolved as gold discoveries, technology,
monetary systems have become available and
changed over time.

05. A HISTORICAL TIMELINE OF GOLD
The timeline
A timeline of gold can be divided into three key stages:
discovery, standardisation, and the modern era.
Discovery: Gold in Ancient Civilizations

(5000 BC to 1091 AD)
5000 BC
Gold has been used in art and
jewellery since the ancient times for
3600 BC its perceived value, aesthetic appeal,
By 3600 BC Egyptian goldsmiths were and workability. The ancient Egyptians
applying metallurgy techniques to used electrum, a natural alloy of gold
mine gold out of ores. The Egyptians and silver, in their jewellery as early as
were highly successful gold miners, 5000 BC.
establishing mining operations and
exploring gold trade opportunities as
far as the east coast of Africa and the
Arabian coasts. 3000 BC
The Sumerians were fond of wearing
gold jewellery in 3000 BC, both by men
and women. In particular, gold chains
2600 BC first began to be created in the city of
A thousand years later, Mesopotamian Ur in southern Mesopotamia by 2500
artisans started using gold to create BC.
jewellery and artworks reflecting
their civilisation, such as the burial
headdress of lapis.

05. A HISTORICAL TIMELINE OF GOLD
In the late 19th century, German archaeologist Heinrich Schliemann’s discovery of the
cache of treasure at Hissarlik in modern Turkey showcased the extensive use of gold
in cities dating from the Bronze Age through to the Roman period, including Troy,
which occurred around 2500 BC. Known as Priam’s Treasure, the discovery of the site
yielded gold objects revealing the skill and mastery of ancient artisans working with
gold, including the Jewels of Helen, a pair of gold diadems; along with rings, coins,
goblets, earrings, and pendants.
1800 BC
The Minoan civilization on Crete were
using gold in jewellery manufacturing
1550 BC as early as 1800 BC.
Gold ‘death masks’ were being
produced by the Mycenaean
civilization at Mycenae. They would
go on to widely use coins for their 1200 BC
currency, however their coinage was
largely made with silver not gold. The Chavins of Peru are known to have
been manufacturing gold goods from
1200 BC, and potentially even earlier.
600 BC
As early as the 7th Century BC, the 564 BC
Etruscans were using gold to assist
with fixing animal teeth in place as part The Lydians were the first known
of their dentistry work. civilisation to use gold for currency,
with King Croesus minting the first gold
coins in 564 BC.
500 BC
The Nazca society in Peru are also 46 BC
known to have perfected the art of
gold casting, though their civilization In 46 BC, Julius Caesar minted the
is more well-known for the amazing largest quantity of gold coins ever seen
pottery and textiles they produced. in Rome to date.

SECTION 06.
Standardization:
Key Historical Events
(1091-1848)
From the Middle Ages through to the modern
era, the use of gold would go through various
transformations, as various civilisations and states
sought to standardise their currencies. Key trends
include standardisation and production at
larger scales.
“Gold is a treasure, and he

who possesses it does all
he wishes to in this world,
and succeeds in helping
souls into paradise.”
CHRISTOPHER COLUMBUS

06. STANDARDIZATION - MODERN - KEY HISTORICAL EVENTS (1091-1848)
Standardization and
production at larger scale
In 1091, the Chinese legalised the use of small squares of gold as currency. By 1284, Venice had
started using a gold ducat that would become the most popular coin in the world, and in 1422
alone, Veniceans minted 1.2 million coins.
Elsewhere, the shift to standardised currency was gaining pace. In 1284, England issued the florin,
the empire’s first major gold coin, which is to be followed by the noble and the angel, crown,
and guinea.
By 1377, England had adopted a monetary system based on gold and silver though a metallic
currency standard that was reestablished a few hundred years before with the Norman
Conquest.
Finally, in 1717, the UK government established a gold standard that linked the currency to gold
at a fixed price. By 1787, the first US gold coin had been struck and in 1791, the US set the price
of gold at $19.49. The US passed a law in 1792 to place the country on a silver-gold standard.

06. STANDARDIZATION - MODERN - KEY HISTORICAL THINGS (1091-1848)
Gold conquests
1370 marked the start
The standardization and production of gold of the great bullion
currency at a larger scale ran parallel to famine, when major
discoveries and conquests. The Egyptians were
involved in some of the world’s earliest gold mines around Europe
conquests as they used slaves and prisoners
of war for gold-mining labour. The Greeks
became completely
had started mining for gold throughout the exhausted.
Mediterranean and Middle Eastern regions
by 550 BC, and the Romans expanded on the SOURCE
know-how of the Greeks by building water-
based mining systems to exploit gold sites.
As an indicator of gold’s significance in human history, the discovery of America and its resources,
including gold and other minerals, might have been a major turning point in human history and
paved the way for a wealthy, imperial Europe.
In the early 16th century, King Ferdinand of Spain started conquering lands in search for gold,
leading to the destruction of civilisations like the Aztec and the Incas, with the amount of gold the
Spanish took from the Aztecs remaining unquantified to this day. The Spanish conquistadors were
interested in gold above all.
By 1720, Brazil would become the largest producer of gold, and account for almost two-thirds
of the world’s supply. In the same year, the UK’s Royal Commission proposed a recall of all old
currency and issuance of new specie with a gold-to-silver ratio of 16:1. This led to the gold price
being established for over 200 years.
In 1848, John Marshall would discover gold flakes in Sacramento, sparking the first gold rush. The
gold rushes of the 20th century were again another major turning point in world history: along with
shaping communication and transportation, they quickened the expansion of empires such as
that of Britain and the US.
Between 1693 and 1720 some 400,000 Portuguese

and 500,000 slaves had relocated to southeastern
Brazil to mine gold.
SOURCE

SECTION 07.
The Modern Era:

Key Historical Events
(1848-present)
In 1848, all major countries (with the exception of
China) moved towards adopting the gold standard
for their currencies.
From 1873 to 1900, the US would transition from

using silver as a standard of value towards an official
gold standard. This meant the US committed to
maintaining a fixed exchange rate in relation to other
countries on the gold standard, rather than relying
on the British gold standard as it had previously.
The 1849 liberty

head design by
James B. Longacre
SOURCE

07. MODERN SECTION - KEY HISTORICAL EVENTS (1848-PRESENT)
Nixon’s
abandoning of
In 1913, the Federal Reserve Act mandated that
Federal Reserve Notes have to be backed 40% the gold standard
in gold. It is not until 1919 and the outbreak
of the First World War that the US and Britain
effectively
suspend their gold standards. Great Britain allowed the US
returned to a gold standard in 1925, before
abandoning it in 1931.
government to
print money
To avert a banking panic in 1933, the US
strengthened regulations by suspending the at will.
US dollar’s convertibility to gold and banning
the holding of gold by private citizens. This SOURCE
forced all private individuals in the US to
convert their gold into US Dollars.
With the introduction of the Bretton Woods

agreement in 1944, a gold exchange standard
was introduced (along with the IMF and the
World Bank). This involved setting par values
for currency, and gold was in effect abandoned
in favour of the dollar.
Later in 1945, the US would pass laws to

reduce gold backing of Federal Reserve Notes
to just 14.5%, and in 1968, gold backing
of Federal Reserve Notes was completely
eliminated.
The ‘Nixon Shock’ of 1971 ended the US

dollar’s link to gold, which was first established
under the Bretton Woods Agreement. This
meant the US dollar became the sole backing Gold was worth
of currencies and a reserve currency for the
member states.
just $20.67 per
ounce in 1933.
SOURCE

07. MODERN SECTION - KEY HISTORICAL THINGS (1848-PRESENT)
In 1973, the US devalued the dollar and raised

the official dollar price of gold to $42.22 per
fine troy ounce. All currencies were then
Gold Prices - 100
allowed to float without concern about the Year Historical
price of gold.
Chart
In the following year, the US passed laws to
allow private individuals to own gold other SOURCE
than just jewellery. A year later, various US

exchanges allowed trading in gold futures,
and by 1978, the US had abolished the official
price of gold.
In 1980, gold prices dropped from $594.92

to $410 and hit $288 an ounce in 1996. It
remained a safe haven investment however, as
investors continued to return in the aftermath
of crises like the 9/11 attacks and the 2001
recession.
And with the introduction of the Euro in 1999,

the new pan-European currency is backed by
the ECB, which holds 15% of its reserves
in gold. Gold Prices vs Oil
In 2008, gold hit $869.75 an ounce at the height Prices - Historical
of the financial crisis. In 2010, gold hits 35 price
highs due to inflation fears associated with
Relationship
various fiat currencies.
SOURCE
By 2011, gold reached an all-time record of

$1,895 due to concerns the United States
would default on its debt. Since then, as fears
about inflation and the economy proved to be
excessive, the gold price has fallen.
Beyond its use in currency purposes, gold

has continued to play a significant role in the
medical and healthcare sectors. Along with
these practical applications, gold to this day
retains rich cultural significance in jewellery,
artwork, and other areas.

SECTION 08.
Gold in the Modern era

Humankind’s appetite for gold has endured for
thousands of years and today, we continue to covet it
for purposes relating to everything from aesthetics to
technology and investing.
One way to understand our relationship with gold is

to view it through the lens of economics, prices, and
business cycles.
The desire for gold is

the most universal and
deeply rooted commercial
instinct of the human race.
GERALD M LOEB

08. GOLD IN THE MODERN ERA
Volatile stock markets

lead to higher gold prices
Gold is traditionally viewed as a safe haven investment, with investors flocking to the metal in
times of volatility. The global financial crisis of 2008 is an excellent illustration of the perceived
value of gold in volatile times.
While gold and other ‘safe haven’ metals did not reach expected heights in 2018 in response to the
US-China trade war and the turmoil in emerging market economies, gold is expected to gain value
again, with other potential causes of volatility like Brexit and US-Saudi tensions looming.
Indeed, large inflows into gold-backed exchange-traded funds could be an indicator that investors
are already turning to gold as a hedge against uncertainty.
Recessions and
The Great Depression
The appeal of gold as an investment and preserver of wealth or value can be observed by reviewing
its performance during times of recession.
The Great Depression sparked by the 1929 stock market crash saw many investors redeeming their
paper currency for its value in gold.
As the US Treasury was concerned the country would run out of gold, the Federal Reserve raised
interest rates, boosting the value of the dollar so it became more valuable than gold in 1931.
The higher rates saw many companies go bust and led to deflation. In turn, this worsened
employment and sent the recession spiralling into a depression.
By 1932, investors were again turning to gold, causing a jump in prices and later forcing Roosevelt
to prohibit private ownership of gold and to raise the price to $35 an ounce.

Gold prices leapt from $20.63 (annual average) in 1929 to $34.69 (annual average) in 1934.
Government spending cuts in 1937 reignited the depression, and it was not until 1939 when the
Dust Bowl drought finally ended and defense spending in preparation for the Second World War
was approved that the depression finally came to a close.
Similarly, in the 1970 to 1975 period, the recession saw gold prices jump from $37.44 (annual
average) in 1970 to $139.30 (annual average) in 1975.
And in the aftermath of the 2008 financial crisis, gold would reach an all-time record price of $1,895
an ounce in September 2011.
Money supply decreased considerably between

Black Tuesday and the Bank Holiday in March
1933 when there were massive bank runs across
the United States.
SOURCE

Gold Price in US Dollars Historical Data

SOURCE
Business cycles
There is evidence that gold prices are correlated with business cycles, and this can be used to
inform a gold-investment strategy.
The two major gold bull markets in recent decades, for example, were correlated with two
economic or business cycle downturns: the early to mid 1970s recession, and the great global
financial crisis of 2008.

Investing in gold price cycles

Gold price cycles tend to reflect economic In summary, changes in the value of the US
conditions. These conditions include changes dollar, economic downturns, interest rates,
in the value of the US dollar relative to other and inflation can all be driving factors behind
foreign currencies. gold price cycles.
In times of a strong dollar, gold prices could be Understanding how these and other factors
stable in dollar terms but more expensive in work to affect gold cycles could allow gold
foreign currencies that have declined in value. investors to succeed at their investment
In turn, this could push the price of gold down strategy.
in dollar terms.
Conversely, when the US dollar weakens,

falling gold prices in foreign-currency terms
could drive up prices, as investors take
advantage of the lower prices.
Similarly, when the economy is weak investors

might turn to gold as stocks when other
financial assets perform poorly.
Lower interest rates could be another factor

when it comes to gold cycles, since lower rates
make gold more attractive as an investment
option compared to alternatives like bonds
and fixed-income investments.
Finally, inflation tends to negatively impact the

value of investment options like stocks and
bonds, in turn enhancing the attractiveness
of gold.
Additionally, inflation is associated with

economic volatility and downturns, which
could further boost the appeal of gold for
investors.

The chart to the right illustrates the four gold

price cycles since 1971. Between 1971 and
1979, gold prices proceeded in a bull
market trend.
From 1979 to 1999, the market largely followed The charts of

a bearish trend. From 1999 to 2011, the these cycles:
market again was bullish, but since then it has
followed a bearish trajectory. bear vs. bull
Zooming into the two-decade bear market T
from 1980 to 2000, at least four gold-price
rebounds can be observed. The first two –
between 1980 and 1982 and then 1982 and
1984 – appear to have lasted only months.
The other two rebounds – around 1986 to 1988

to 1993 to 1996 – lasted far longer, around 34
or 35 months each.
Analysis of these gold-price cycles within

cycles can also yield investors some valuable
insights for opportunities to make gains.
Gold as a Gold bull and

perennial bear markets
option for SOURCE
hedging against
volatility
Although gold prices track both bullish as well
as bearish trends, the long established history
of gold as a safe haven investment appears to
reaffirm gold as a hedge against volatility. Gold
is an investment option that will be valuable
for a thousand years or more in contrast
to stocks.

SECTION 09.
The case for buying and

keeping gold
The case for buying and holding gold include
its history of holding value through the ages, its
potential for hedging against volatility, and
its security.
Gold – what can it not

do, and undo?
WILLIAM SHAKESPEARE

09. THE CASE FOR BUYING AND KEEPING GOLD
A hedge against
market volatility
Gold offers a hedge against market volatility, whether the volatility is rooted in factors like inflation,
weak economic activity, interest rates, a fluctuating US dollar, geopolitical instability, or another
driving factor.
Gold price per troy ounce in USD since 1960, in

nominal US$ and inflation adjusted in 2012 US$.
SOURCE

When the economy is in a downward trend and/or stocks and other investment alternatives are volatile,
gold typically becomes more attractive to investors because it helps them offset losses in other asset
classes.
Research by Trinity College has confirmed that gold remains the best hedge in times of a potential
stock market crash, since gold prices tend to increase dramatically for 15 days after a crash.
High levels of government debt around the world placing pressure on the value of various currencies
could be another compelling trend for gold’s ability to hedge against currency volatilities.
The US dollar tends to impact the gold price more than others because gold is often denominated
in dollars.
Chart of gold’s rise in price after the

housing bubble burst in 2007/8
SOURCE

The tangibility and

enduring value of gold
compared to technology-
based assets
Gold is a tangible asset and by nature it cannot be stored digitally and therefore hacked or stolen in
a virtual sense. Additionally, it is dissimilar to technology-based assets or technology trends where
ephemeral or fleeting value might be common.
This is due to disruptive new technologies superseding legacy brands, technological know-how,
and/or technical intellectual property.
At the same time, the supply of gold is finite. Scarcity and limited supply could contribute to the
enduring value of gold by driving higher prices.
New discoveries no longer match the supplies of gold afforded by the gold rushes of the 19th
century, and economic powerhouses like China and India are major importers of gold.
Gold is a highly popular asset class in Asia, the most economically dynamic region in the world.
Further, not only is gold a direct investment; it has practical applications in healthcare, technology,
and jewellery making.
This means its price is driven not only by investors but also by industry trends, in the context of
finite supply.

Gold has cultural

significance
Closely linked to this enduring value of gold and perhaps driving its value is the fact gold has
cultural significance across the world. For some reason – perhaps its natural beauty and radiance
– gold has always been the one we associate with value, money, and currency.
Gold has been used in art, religion, medicine, healthcare, and currency for millennia in almost
every known culture. Whether due to its brilliant colour or other qualities, gold appears to have
achieved a level of universal cultural significance like no other precious metal.
Cultures in Egypt, Greece, Rome, Thailand, China, the Americas, and Europe vested in gold an
extraordinary level of economic, religious, and social significance. This long historical cultural value
is perhaps yet another factor behind the perception of gold’s value – and therefore its demand,
price, and value – today.
It is a security of legacy and wealth, and

is a very reliable means of keeping and
holding wealth
The self-fulfilling-prophecy effect of gold could mean it is a secure vehicle for preserving legacy
and wealth, whether this is across a number of years, decades, or generations in a family. In this
sense, gold is a direct investment for individuals seeking to retain wealth.
Propelling this could be gold’s status as a precious metal in across human history, its early origins
as currency, and its historical status as the base for the gold standard.
It could be said through these historical, cultural, and economic factors, gold remains a valuable,
effective, and secure asset for securing wealth across time.

SECTION 10.
Investing in gold
When it comes to investing in gold, investors have
a lot of options. To investors, gold tends to be more
accessible than, for example, a barrel of oil, and with
the availability of advanced financial instruments,
gold can be invested in without purchasing the
underlying asset: the gold itself.
Generally investors have three main choices; buy

the physical asset, invest in ETFs that replicate gold
prices, or trade futures and options.
Hunger for gold is

made greater as more
gold is acquired.
AURELIUS CLEMENS PRUDENTIUS

10. HOW TO INVEST IN GOLD
Physical gold
Investors might purchase gold as part of their portfolio diversification strategy, and owning the
physical metal is one way to achieve this.
Advantages Disadvantages
One key advantage of owning physical gold Buying physical gold means you might need to
is the investor can be confident they have full ensure your gold coins or bullion are kept safe,
legal title over the gold. Additionally, they can in perhaps a safe deposit box or a home safe.
trade the asset around the clock. Another drawback or potential risk is having
to vet gold dealers to ensure the investor is
Further, in the long run, gold bars and coins dealing with a reputable dealer.
could offer the most cost-effective way to
invest in gold. This is thanks to the option Buying physical gold means the investment
to lower storage costs by storing at home matches the gold price (spot price with
or a private vault, though the investor is transaction and storage prices added) – gold is
responsible for keeping the gold safe. exactly what you’ve bought. In contrast, other
options like ETFs that only track the gold price
There is potentially no third-party risk as long might not do so as closely.
as you don’t buy gold in securitised form. The
general advantages of investing in gold – risk
reduction, hedge against currency devaluation,
wealth preservation, and diversification –
apply to investing in physical gold.
Earthquakes turn water into gold.

SOURCE

Gold futures
Gold futures are a popular option for investing in gold. Investing in gold futures means the investor
pays an initial sum to enters a deal to trade gold at a certain price and volume at a future
settlement date.
The investor pays the full price for the gold only when the date arrives and the deal is settled.
Advantages of trading in gold futures include Gold futures could be associated with higher
not needing to arrange immediate storage. default risk. Prices can be volatile and
Investors can speculate both ways and realise fluctuate, which means the investor could end
large returns if they successfully anticipate the up losing a considerable amount of money.
movement of gold prices.
Futures exchanges determine the spot price of gold,

and these prices can sometimes diverge from the
real-world pricing for the physical metal.
SOURCE

ETFs
Exchange Traded Funds (ETFs) allow investors to trade by buying shares but with the benefit
of a direct investment in gold. They are backed by physical gold, and investors can buy these
through brokers or online facilities.
ETFs are highly flexible, as any investor with a One key drawback of ETFs is investors do not
brokerage account can invest in them. actually own the gold when they invest in
an ETF.
They can be used, much like golds futures, to
speculate on gold price trends or to hedge Instead, they buy a security that in theory is
against a position. backed by gold that is owned by a third party.
Investing in ETFs means investors can avoid Trading is limited to only when the stock
the inconvenience and costs associated market is open, and ETFs come with
with storing physical gold. management fees whilst the gold itself
produces no income for the investor.
The relative
3 Olympic swimming
price of gold pools can hold all the
gold ever mined in
Gold ETFs tend to closely track the actual price
of the underlying commodity. the world.
However, if the ETF is of the type that invests SOURCE
in gold companies, the ETF might not be as

closely correlated to gold prices.

10. HOW TO INVEST IN GOLD Artwork of Chinese workers
excavating and washing gold
ores at a gold mine in Australia.
Investing in
The worker in the foreground
is using a device called a
cradle (berceau) to wash ores
gold mining
containing gold.
The rocks, sands and gravel

from the excavations are placed
Another way to invest in gold is to invest in in the upper box, which has
gold mining by buying shares in gold a perforated base. Water is
mining companies. poured over the rocks to carry
the lighter rocks and specks
of gold to the lower level. This
Advantages lower level is an inclined plane,
covered in a blanket.
If investors buy shares in a company that The device is rocked using the
eventually becomes successful, they could lever, and the lighter waste
enjoy good returns. gravel exits at right, while the
gold collects at the other end of
Another advantage is the shares of these the device. Artwork from Mines
mining companies tend to trade at a large
and Miners (L. Simonin, 1868).
discount relative to the price of gold.
It is relatively simple to invest in these SOURCE
companies, as you can buy the shares through

a broker or online trading platform.
Disadvantages
Purchasing shares in mining companies could
be one of the riskier ways to invest in gold.
These companies might never find gold or

locate a profitable mine. Those that find viable
sites might have their profitability affected by
output variations and costs, which can lead to
share price volatility.
Note:
Investing in the shares of a gold mining company may allow investors to gain exposure to the gold price. However,
note the potential for growth and returns on the shares are determined by the future earnings of the mining company
and not only the price of gold

What about
blockchain?
Advantages
Fungibility
Fungibility means each unit of the underlying
“If you use precious
good or commodity, such as gold, is metals to back
essentially interchangeable. One gram of pure
gold is interchangeable with any other unit something on
and is valued the same. The fungibility of gold blockchain or
makes it easier to trade, and this could be
advantageous for blockchain-based trading. something that is
Bitcoin and other cryptocurrencies are also
allied to blockchain,
inherently fungible, which means they can it retains its
easily be “tagged” to represent units of gold to
facilitate the trading of the precious metal. intrinsic value,
unlike the offerings
Blockchain is from Bitcoin and
more secure Ethereum, which
really rely on
Blockchain is designed to be immune to
tampering or hacking. The process uses
everyone believing
a cryptographic fingerprint unique to each that there’s
block, as well as a so-called ‘consensus
protocol.’ The security benefits of blockchain- something behind it.”
based gold platforms could mean lower
counterparty risk and ease of verification of RICHARD HAYES, PERTH MINT
ownership of gold. The result could be greater

trust, transparency, and efficiency.

It’s fast Optional storage

Blockchain-based trading platforms could also Investors could store their own gold (at home
facilitate price discovery, streamline settlement or in a secure vault) traded over blockchain-
and ownership verification, enhance liquidity based platforms, or they could take advantage
of gold-trading markets, and thereby speed up of blockchain-based gold marketplaces that
the process, whilst still ensuring accuracy. hold the physical gold in trust on their behalf.
Disadvantages
Few players in the market are doing it right
Blockchain-based gold trading is yet another way to invest in gold. While blockchain could
eventually allow investors and players to trace the origin of the gold they’re investing in, currently
the complexity of the commodities sector means some players might not yet be able to offer full
transparency.
Eventually, however, investors could participate in a more transparent environment

encompassing the supply chain as well as the trading process.
Current blockchain players in the gold-trading space could have additional yet-to-be-realised
opportunities in optimising post-trade settlement processes, along with turning gold into a true
digital asset.
Investors need to conduct An immature market for

due diligence the blockchain-focused
While blockchain-enabled trading could make Finally, the blockchain-based gold trading
the transaction process more secure, as with market might still be in its early stages, with a
any type of investing, the investor still needs to number of players launching their products
conduct due diligence into both the underlying only in recent years.
asset, the gold, and the platform or tool
enabling the trade. Blockchain itself is still a nascent technology,
so it might be some time before its true
This is because the gold exchange itself could potential for facilitating gold investing
be fraudulent, and the blockchain transaction becomes clear. Tokens that represent a real
itself could come with certain risks and connection to physical gold offer a
vulnerabilities. reliable value.

The relative price of gold

Blockchain-enabled gold trading could closely track the price of gold if investors are directly buying
or selling physical gold. However, other types of blockchain-based trading options might diverge
from gold prices.
For example, smart contracts, like futures contracts, might or might not closely track the
gold price.
Comparison chart
Physical Gold ETF Gold Blockchain

Gold Futures Gold Mining Gold
Accessibility Yes No No No Yes

(Novem)
Market Price Yes Depends Depends No Yes

(with fees) (markets
fluctuate; (more than (operating
valuated 1/day) gold futures) costs)
Third-Party Yes No No No Yes

(by seller)
Verifications
Fungibility No (Limited) Yes Yes Yes Yes

SECTION 11.
Blockchain for
a modern gold
ecosystem

11. BLOCKCHAIN FOR A MODERN GOLD ECOSYSTEM !
Blockchain
is here
to stay
The technology underpinning cryptocurrencies
and blockchain has been available for around
a decade, and it’s likely here to stay.
From cryptocurrencies and transactions

to medical and real estate transactions,
blockchain is expected to continue shaping
our world in a multitude of ways across
thousands of industries.
Some of the reasons for this could be the ways

it affords greater transparency, the removal
CRYPTOCURRENCY MARKET
of middlemen or facilitating institutions,
efficiency, versatility, and security.
Blockchain technology and

their core features
Core features of blockchain technology can ♦♦ Has the eventual goal of building
be understood by exploring platforms and a distributed network-based smart
cryptocurrencies such as NEO and Eth. economy system
♦♦ Enables the digitisation of assets on
NEO’s key features include the following:
the NEO blockchain in a transparent
and decentralised manner without
♦♦ Supports its own cryptocurrency
intermediaries
including NEO and GAS
♦♦ Allows users to exchange different kinds
♦♦ Supports the development of digital
of assets by linking the physical asset
assets and smart contracts
with a unique avatar.

Ethereum’s key features include the following:
♦♦ Offers a distributed public blockchain network

♦♦ Allows developers to build decentralised applications using blockchain technology
♦♦ Enables smart contracts, so self-executing contracts from performance to payment
♦♦ Can support decentralised applications for any industry, from voting to banking
Gold blockchain landscape

The gold blockchain landscape has evolved as more players enter the space. Different players
have used various platforms to build their gold-based securities or stablecoins, which are
designed to have a fixed valued through pegging to a real underlying asset and so, in turn, to
that asset’s history of trust and reliability.
This means they have an intrinsic value and tend to be much less volatile.
♦♦ Digix - Digix is a Ethereum-based stablecoin that ties the value of its DGX
token to one gram of gold
♦♦ Novem - Novem, 100% backed by LBMA-certified gold with 100 tokens

exchangeable for 1g of gold, is built on the NEO blockchain platform. Gold
is securely stored by Loomis and audited by third-parties
♦♦ Eidoo - Eidoo has created a Ethereum-based stablecoin, the ekon. Each

ekon is redeemable for 1 gram of 99.9% pure gold, and the reserves will
be audited every three months
♦♦ DinarCoin - is a Ethereum-based gold trading platform, and its value is

equal to a gold spot contract and the XAU, as well as being backed by
physical gold at rates of 1g to 100g of gold (silver is also used).
♦♦ Royal Mint Gold - Royal Mint Gold is a cryptocurrency backed by gold

reserves in its UK-based Royal Mint vault at a rate of 1g to 100g per token.
Royal Mint Gold is built on Prova, and open source blockchain.
♦♦ X8currency - X8currency is a stablecoin also built on Ethereum’s

blockchain platform. Backed by gold and eight fiat currencies, the
company’s gold reserves are located in Switzerland. Coins are linked to
gold based on real-time price fluctuations.

Is history repeating itself?

Is the rise of cryptocurrencies like Bitcoin mirroring the gold rush of the 19th century? Certainly,
there appear to be strong parallel trends between the rise of blockchain-enabled cryptocurrencies
and the history of gold.
Gold & cryptocurrencies: parallels

The California Gold Rush and the Bitcoin rush could be roughly broken down into three major
stages.
♦♦ The boom - Between 1848 and 1852, 90,000 gold miners moved to California and
achieved record gold yields. Between April and November 2013, Bitcoin leapt from $97 to
$1,119.
♦♦ Technical innovation - Both gold and Bitcoin experienced an innovation stage, where
1853 saw hydraulic mining elevating the rush into an established industry. As for Bitcoin,
by 2014 there were more than 300 startups and millions of dollars invested in the space,
driving innovation.
♦♦ Plateau - By 1857, gold yields in California had settled down to $45 million a year, and
similarly, Bitcoin prices seemed to have stabilised after massive growth by 2014.
♦♦ However, the total value of all Bitcoin extracted by January 2014 ($9.1 billion)
far exceeded the Gold Rush volumes as of 1856 ($2.23 billion).
♦♦ Bitcoin of course peaked at nearly $20,000 in December 2017, but had fallen back to
$6,400 a year later.
♦♦ Recently, Bitcoin has traded with a strong correlation to gold prices, due to
various factors.
While bitcoin has been called “blockchain gold” the comparison does too much justice to bitcoin
and not enough to gold. Gold has endured for thousands of years without the wild fluctuations that
bitcoin has experienced just in the last decade.
It might be too early to tell if bitcoin and other cryptocurrencies are as good as gold at storing
value, but the future seems bright for these blockchain-based currencies.

Perhaps stablecoins pegged to gold offer the best of both worlds for investors seeking to avoid the
volatility of cryptocurrencies.
Rapid evolution leading to the

rise of major players
In a space where regulatory clarity is pending, what can investors expect? The early years of
cryptocurrency speculation might be over, and it could be followed by accelerated evolution
as the industry matures.
Investors could expect to see major players in blockchain, cryptocurrencies, and stablecoins
come to the fore. The best of these players could scale up and become dominant in the
coming years.

SECTION 12.
An introduction
to Novem
Novem is an industry-leading gold storage and asset
management company that was incorporated in
Liechtenstein and based in Austria. Novem is due to
launch their NNN token, the world’s most transparent
gold-backed stablecoin, in 2019.
As cited by Forbes, Novem has approximately 35 kg

in LBMA-certified gold (Q1: 2019), stored securely by
Loomis International. The amount of gold translates
to almost $1,500,000 USD in collateral.

12. AN INTRODUCTION TO NOVEM
Novem is an easier way to

buy gold
Among Novem’s goals are revolutionising This will be the first gold-backed token
the gold-buying experience for investors. launched on the blockchain-based NEO
Its NNN or 999.9 golden token will be 100% platform, offering unparalleled security as
backed by LBMA-certified gold held in trust the platform will soon be hardened against
in Frankfurt, Germany, by Loomis. quantum computers.
Each NNN will be redeemable for physical Novem offers a second token, the Novem
gold, with each token exchangeable for (NVM), which is a true utility token used to
1/100g of gold (100 tokens is equivalent to pay for services and trading costs relating to
one gram of gold). the 999.9 or NNN gold token.
There is no honest man – not one

– that can resist the attraction of gold!
ARISTOPHANES
Who they are to create a better, more secure way for

people to buy and sell gold. The result was
Novem and its NEO-based token, NNN.
Today, Novem is comprised of its its expert
Novem was founded by Wolfgang Schmid founders as well as a world-class team
and Mario Schober, two experts in precious of professionals with expertise in digital
metals and gemstones with global trading development, offline and online marketing,
experience spanning Germany, Austria, and business development, and project
the U.A.E. management.
Having encountered major deficiencies Located in Vaduz, Liechtenstein, where

associated with fraud, deception, and stringent cryptocurrency regulations
trust and transparency in the precious apply, Novem has been founded on a
metals industry, Novem’s founders set out solid foundation for providing the safest
stablecoin in the world.

The goals
Novem is changing how gold is bought, sold, and store around the world. Both tokens - the
NNN gold token and NVM - are designed to facilitate easier, safer transactions for those
buying gold and trading on exchanges.
Safety and security first
Novem’s highest priority is offering a safer and more secure option for buyers and traders.
Novem offers a superior way to purchase gold, with all purchases verified by third parties. The
NEO-based blockchain technology is highly scalable and secure and all transactions are recorded
in an unalterable record on the blockchain.
For those seeking to own gold, Novem’s third-party certified and managed gold-backing system
allows investors to own and hold gold safely for the long term without having to manage the
physical asset.
A vision beyond tokens
Novem has two key goals:
♦♦ Modernisation of metals industry procedures - Create an immutable, secure, and

distributed ledger of ownership in order to modernise the outdated procedures of the
metals industry.
♦♦ Large network of stores - Establish a large network of stores that operate on ethical
principles and provides certainty for gold buyers, refiners, investors, and traders.
Novem’s planned network of retail stores will enable investors and other members of the
general public to bring in their jewellery and old gold to sell, with the ability to exchange gold
for fiat (local currency), and eventually, cryptocurrencies, like “Novem tokens.”
Both institutional and sophisticated investors have taken a strong interest in Novem through
private sales, due to Novem’s scalability, business model, and team.

Why Novem choose to build on NEO Blockchain
Novem chose to build its cryptocurrencies on NEO for two key reasons. First, the NEO blockchain
platform offers incredible functionality, including smart contracts, and NEO has a large, diverse
developer community.
Second and more importantly, NEO will soon be proofed against quantum-computer attacks,
which enhances the long-term safety for token holders. This is a particularly vital concern when
buyers are dealing with considerable quantities of gold.

SECTION 13.
The future of gold

13. NOVEM IS THE FUTURE OF THE GOLD INDUSTRY
Blockchain technologies are likely the path

forward for gold and other precious metals,
allowing players to tokenize the asset to
facilitate trade, as well as track complex
supply chains to improve quality and
reduce fraud.
Even the LBMA has adopted blockchain

technology to assist with their supply
chain tracking.
Security, safety, reduction of number of

parties required to verify payments, and You have to choose
dramatically shortening transaction times
are some of most compelling drivers of (as a voter) between
blockchain’s promise for
gold trading.
trusting to the
natural stability
Novem’s NNN is well-positioned to make
a large impact in the gold industry. Novem
of gold and the
provides investors with the ability to own real natural stability of
physical gold that is safely stored and audited
by third parties.
the honesty and
intelligence of the
Since Novem has developed strong
relationships with major players in the members of the
industry, they have the potential to offer more
competitive gold prices for buyers at scale.
Government. And,
with due respect for
these gentlemen, I
advise you, as long as
the Capitalist system
lasts, to vote for gold.
GEORGE BERNARD SHAW

13. NOVEM IS THE FUTURE OF THE GOLD INDUSTRY
The winner
is still gold
Gold has been used for trade and to store
value for centuries, and the emergence of
blockchain-based technologies like Novem’s
gold-backed token offering could mean,
rapid modernisation of how gold is traded,
as well as supply-chain tracking.
Age-old issues like validation of quantity

and ownership, transferring and security
of the physical asset, and securing the
transaction and payment could be
easily addressed by blockchain-
enabled platforms.
With players like Novem leading the There can be no

innovation wave and race to market, the
precious metal industry, gold buyers,
other criterion, no
refiners, and investors could enjoy optimal other standard than
levels of security and transparency along
with unmatched transactional efficiency. gold. Yes, gold which
It is a fair bet, backed by thousands of
never changes,
years of observation, that gold will retain which can be shaped
and grow its value in the long term, despite
short-term fluctuations. However, ways
into ingots, bars,
to buy, store, hold, and trade gold will coins, which has
continue to evolve -- and the smart investor
will evolve along with them. no nationality and
which is eternally
and universally
accepted as the
unalterable fiduciary
value par excellence.
CHARLES DE GAULLE

NOVEM
A Better Way to Buy Gold

The Definitive Guide to Understanding Gold's Timeless Value

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The Definitive Guide to Understanding Gold's Timeless Value

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The

BROUGHT TO YOU BY NOVEM

N O V E M The definitive guide to gold 2

expression we have to the idea of “value”.

While currency itself is an invention of humankind,

The history of gold is the history of currency; the

N O V E M The definitive guide to gold 3

The value of gold

Its timeless appeal and humanity’s long historical

N O V E M The definitive guide to gold

N O V E M The definitive guide to gold 4

Why do we buy gold?

“Gold has been discovered on every continent on Earth.”

Gold always has value

N O V E M The definitive guide to gold 5

All currency is founded

All currency is based on belief, and it’s believed

Beyond the human belief in gold’s value, gold

N O V E M The definitive guide to gold 6

Spices and salt have been used as currency. What

In addition, other key factors include the ability to

N O V E M The definitive guide to gold

N O V E M The definitive guide to gold 7

Skill in minting gold

Uncommon uses for gold

N O V E M The definitive guide to gold 8

For health-related applications gold was used

Gold’s use in medicine is likely due to its

N O V E M The definitive guide to gold 9

Gold endures where other

Scarcity and availability

N O V E M The definitive guide to gold 10

Duality Only so much

Weights, maths, and measures

N O V E M The definitive guide to gold 11

The means to measure and

The public trusts validation

N O V E M The definitive guide to gold 12

Market forces and

N O V E M The definitive guide to gold 13

Infrastructure and the

Minting gold coins – and using them as a means

N O V E M The definitive guide to gold

N O V E M The definitive guide to gold 14

N O V E M The definitive guide to gold 15

The ease of exchange and transactions a

N O V E M The definitive guide to gold 16

The rise and fall

Due to a currency’s essential role in economies, its

N O V E M The definitive guide to gold

N O V E M The definitive guide to gold 17

The Marcus Aurelius

Gold provides a foundation

N O V E M The definitive guide to gold 19

The creation of banking

N O V E M The definitive guide to gold 20

With banking comes credit

From these early banks, the fractional reserve

The fractional reserve system attempts to ensure

N O V E M The definitive guide to gold 21

Greece and Alexander the Great

Greek-influenced territories accepted Roman

N O V E M The definitive guide to gold 22