The Silent Rise of Gold: Lessons from 30 Years in Financial Markets

When I first began my career in London in 1994, my Saturdays often started with a ritual: a quiet morning at Waterstones on Tottenham Court Road. Among the shelves, I found a haven where I could dive into books on finance and financial markets, indulging my curiosity and always leaving with a book or two. It was during those formative years that Fabozzi, through his texts, became my unofficial tutor.

What intrigued me most about financial markets back then was their seemingly paradoxical nature. The highly anticipated U.S. economic indicators, which moved global markets, were in essence temporary placeholders. They were frequently revised when newer numbers emerged, a pattern that underscored the ephemeral nature of certainty in economics.

A Front-Row Seat to Financial History

The mid-90s offered a masterclass in market turbulence. I witnessed the Italian government, led by Berlusconi for the first time, usher in a fiscal strategy that sent 30-year government bonds to dizzying yields—an opportunity for those who dared, as cash prices plummeted by nearly 60%.

Then came the collapse of Barings Bank in 1995, a cautionary tale about the unchecked risks of rogue trading. The European Union was being formalized, and the volatility in OTC bond options was beginning to ease, only to be followed by the shocks of the Russian and Asian defaults. Overlaying this period of heightened market volatility was the quiet brewing of an entirely different storm—the dot-com bubble.

By 2000, I had moved to Frankfurt. Conversations with Neuer Markt gamblers often left me feeling uninformed for not owning internet stocks. As it turned out, my reluctance was fortuitous. When the Neuer Markt imploded, wiping out fortunes, I emerged unscathed—a rare moment of being “stupidly lucky” in the financial world.

The Turning Point: 9/11 and the Great Repricing

The terrorist attacks of September 11, 2001, profoundly altered the world—and financial markets. By 2004, I was in Paris, diving deep into inflation-linked products and break-even inflation rates (BEIR). I learned quickly that banks excelled at crafting synthetic products, enabling institutional investors to gain exposure to assets they couldn’t legally own outright.

Little did most foresee, however, the monumental risks embedded in asset-backed securities (ABS) and collateralized debt obligations (CDOs). When the bubble burst in 2008, the hurricane swept through the financial world, leading to the now-infamous term “too big to fail.” The collapse of Lehman Brothers marked a pivotal moment, as governments intervened to save banks, shattering the classical assumption that market forces alone dictated survival.

The Unseen Player: Gold’s Quiet Ascent

During these years of economic upheaval, one asset began to chart a silent yet steady rise: gold. Once dismissed as a mere industrial metal by the end of the 1990s, it began its transformation into a safe-haven asset. The dynamics changed further post-2008. While markets previously collapsed and rebounded as optimism returned, quantitative easing (QE) began to distort this rhythm. Instead of a predictable fall, markets often rose—an anomaly I struggled to explain until recently.

The Distribution Effect: A New Perspective

Listening to Gary’s Economics on YouTube offered clarity. It wasn’t just about monetary injections; it was about distribution. Those receiving central bank funds or government bailouts poured money into real assets, fueling what I now understand as real asset inflation. Meanwhile, products and services often faced deflationary pressures. The published inflation rate—the number most of us see—did not reflect this stark reality.

For the average person, real estate values seemed perpetually out of reach, rising far faster than wages. But gold, with its accessibility in various ingot sizes, offered an alternative. Unlike property, gold’s value transcends borders and economic systems, making it a universal benchmark.

A Golden Standard for the Future

Reflecting on three decades of financial booms and busts, one lesson stands out: assets like gold provide a hedge not just against inflation but against the unpredictable swings of a financial system increasingly defined by intervention and inequality.

To understand this, I challenge you to think in ounces of gold. Compare your salary today with what it would have been in gold terms 20 years ago. Has your purchasing power increased, or has gold simply revealed the erosion of currency value over time?

To begin thinking in gold ounce terms, leverage tools like ChatGPT to calculate historical and current values. Simply ask, for instance, “In 2000, I was earning €25,000 per annum. In 2025, I am earning €50,000 per annum. How much is this in gold ounces then and now?” and uncover insights into your financial journey.

The rise of gold, though silent, holds lessons for us all. In a world where financial certainty remains elusive, this age-old asset continues to shine as a beacon of stability and value.