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Nothing has had a more profound – yet often underestimated – influence on the course of human history than gold.
So argues Dominic Frisby in his new book "The Secret History of Gold – Myth, Money, Politics and Power".
The Secret History of Gold – Myth, Money, Politics and Power.
Gold's history – and its future – matters to investors, too.
Is gold's 70% rise over the past 18 months just the beginning of a much larger, longer-lasting bull market?
And if so, how can private investors take advantage of this trend?
I spoke with Dominic Frisby – author of several books, including the UK's first on Bitcoin, published back in 2014 – about all this (and more!).
Will his latest work prove equally timely?
Read our conversation and judge for yourself!
Swen Lorenz: It's always a pleasure to read a book that distils decades of insights into a single book. You've spent years studying gold and investing in the sector, so it's no surprise that your latest work is a dense, enjoyable compendium of gold's history and significance. I had no idea that gold is mentioned over 400 times in the Bible. What did it take to research gold's story across millennia and condense it into a 288-page book?
Dominic Frisby.
Dominic Frisby: That's very kind of you. Thank you. It was actually more than 400 pages but the editor was insistent on keeping the word count to 70,000, so there was a lot that got sacrificed. Broadly speaking, I tried to keep the bits that were the most entertaining or interesting.
I had done one of my Edinburgh Festival lectures with funny bits about gold a couple of years earlier, and obviously, I've been writing about it for many years, so I knew a lot of what I was going to say already, but there were all sorts of discoveries I made along the way, especially all the stuff about the gold rushes and then the failures of the various gold standards during World War II.
It's one of those subjects that is as big as you want to make it. You can go through ancient texts looking for stories about gold if you really want. The bibliography is quite long, but I would say there were about 15 books that were essential.
SL: To go straight to the more recent history with immediate relevance to investors, the book sets out how in 2007 China became the world's largest gold producer. The Chinese keep acquiring gold properties in Africa, South America, and other parts of Asia. What are they up to and what does it mean for gold going forward?
DF: Well, the Chinese need a reliable store of wealth that is not the US dollar or US debt, and there are not a great many alternatives. They have been the world's largest producer since 2007 and the world's largest importer since before then. Something like 40,000 tonnes of gold (maybe one-fifth of all the gold that has ever been mined) has made its way to China this century, and the accumulation shows no sign of relenting. If anything, it's accelerating, especially since the US confiscated Russian assets after its invasion of Ukraine.
What does it mean for gold? The bull market is not done yet.
SL: Over and above the interest of China, can you set gold's recent rise into context with what's going on in geopolitics right now?
DF: I can do that in one word. De-dollarisation.
JD Vance called having the US dollar as reserve currency a "tax" on US producers. What does he mean by that?
He's referring to what economists call "Triffin's Dilemma".
You might think it's an advantage to issue the global reserve currency. You can issue dollars. Everyone else has to work for them. The US engineered this status for the dollar during the Bretton Woods Agreement that determined the monetary order at the end of World War II.
To supply the world with dollars, the US must run trade deficits. That is to say it must buy more than it sells. Persistent trade deficits have, over time, eroded its industrial base. Factories and jobs have gone offshore. Foreign nations have used their profits to invest in US capital markets and its debt. So at the same time as de-industrialisation, we have had "mass financialisation". Wall Street has grown while Main Street has eroded away.
The Trump administration gets it in a way its predecessors did not.
Never mind President Trump's desire to revitalise the rust belt for the good of US workers,the US was caught with its trousers down during Covid, when it found itself reliant on Chinese supply chains for critical goods, then again during the Ukraine conflict when Russia was able to manufacture munitions quicker than NATO. For important strategic reasons, the US needs to get manufacturing again.
Hence we have tariffs, a weaker dollar, and the widely overlooked third part of the trinity: the relinquishing of some of the US dollar reserve currency status.
What then replaces the dollar?
The US is happy to let gold serve this function. China is happy with that, too. Gold is neutral and both countries have lots of it. So, earlier this year, we see the dollar fall below 50% of assets held by central banks for the first time this century, gold meanwhile has doubled from 10% to 20% over the last decade and, in doing so, overtaken the euro to become number 2.
Who then is going to buy US debt as the world slowly de-dollarises?
There is the real possibility that short-term liquidity requirements are met by the revaluation of US gold reserves. Currently, the 261m ounces in US reserves are marked to market at the old price of USD 42/oz. But mark them to market at the current price of USD 3,400/oz, and you suddenly "create" some USD 850bn. Treasury secretary Scott Bessent has gone from saying "he will not do this" to "he will not do this yet".
Meanwhile, we have the rapidly growing stablecoin market. Currently, with some USD 250bn, it is predicted to be worth USD 4-5tn by 2035. Roughly half of all stable coins are backed by US debt. Tether is the world's seventh-largest buyer. So the US is going to sell a large part of its debt through this market, effectively offsetting what is no longer going to be bought by central banks as they gradually de-dollarise.
It's a managed decline of the dollar, and gold and bitcoin – the neutral currencies – will be the big beneficiaries.
SL: It all begs the question how the US is going to react to these actions of its geopolitical rivals. It still owns several times more gold than any other nation on Earth – or, at least, so we are led to believe. Is the gold really in Fort Knox? The idea of an audit of the US gold reserves has gone rather quiet, hasn't it? And could you see the Trump administration take any steps to get gold more closely into the mix of monetary policies?
DF: Well, the US imported a lot of gold between December 2024 and February 2025, though how much, if any, made its way to Fort Knox is a mystery.
But Fort Knox, despite Bessent saying he has seen the gold, has not been properly audited in 65 years, and the longer this continues, the more suspicious one gets as to it actually being there. I'm pretty certain that, even if it is there, it is not of good delivery quality. A lot of it will be coin melt from the 1932 confiscation when coins were only 90% or so pure – 22 carat. If they had remelted the coins, there would have been an audit.
So yes, it is very suspicious.
Even without it being official money, gold still plays an important role as a reserve asset, and this role is going to increase.
SL: Can you put the current gold price into historical context for us? Is it now as high as its nominal price chart suggests?
DF: I have to say: gold is not looking cheap at all when you look at its price relative to other commodities, especially oil, but commodities are prone to the deflationary forces of improved productivity. It's also not looking cheap relative to housing either.
Versus stock markets, however (Dow or S&P to gold ratio), it is not looking quite so extended, but it is still not cheap. Versus money supply – another important metric – gold is not unreasonably priced.
In other words, there is room for gold to go higher, which is inevitable anyway as its gradual "remonetisation" continues.
But it's important to remember gold will be a reserve asset (or a store of wealth) – it won't be a medium of exchange. We are not going back to a gold standard, not, at least, as most people understand it to be.
SL: In commodities, the saying goes "high prices cure high prices", meaning that higher prices reduce demand and bring more supply, which bring prices down. Gold is said to break this rule. Please explain this to us.
DF: Global mine supply is not a factor with gold pricing to the extent that it is with metals or other commodities for the very reason that gold does not get consumed, so all the gold that has ever been mined still exists and could in theory come to market. But it doesn't. It mostly sits in vaults or round people's necks. Obviously, the higher gold goes in price, the more production is incentivised, but the increased supply will not collapse the price in the way that it might if it were oil or copper. And it takes years for gold mines to get discovered, permitted, financed, and built, so supply is quite inelastic anyway.
Similarly, the higher gold goes in price, the more people might be motivated to sell – we'll see all those "buy gold now" signs coming out of the woodwork as we did towards the top of the 2001-11 bull market. But demand is fairly persistent, whether from India, China, jewellery, western investors of central banks.
Gold lacks viable substitutes as a trusted asset, so high prices often attract rather than deter more buyers, breaking the typical cycle of reduced demand and increased supply.
The price of gold is driven by things like fear and greed, momentum, falling trust in leadership. It's an emotional metal.
SL: What would it take for us to see a blowout scenario where gold rises to USD 10,000 per ounce or more? Is there at least a small chance of such a scenario happening during the remainder of this decade? Wouldn't central banks always try to contain such a situation because a rising gold price gives cause for alarm?
DF: I don't think USD 10,000 such an impossibility. A little bit of fear, a little bit of greed... Gold bull markets tend to end in blow-offs such as we saw in 2011, and 1980 even more so. The final 30% could all be blow-off.
China could declare its real gold holdings. The US might admit its vaults are emptier than previously realised. There could be a crisis in the bond markets, as in 1980. Mass unemployment because of AI (for example millions losing their jobs to driverless taxis and trucks) could trigger another money-printing episode. The ongoing devaluation of the US dollar could get overdone. World War III could start. There are lots of potential triggers out there.
SL: If the world were to go to hell both financially and politically while owners of gold benefited, surely there would be a public backlash. As your book describes in quite some detail, gold ownership was banned in parts of the Western world for many decades. What measures do you think Western governments might take against owners of gold?
DF: I have no doubt that the canny folk who bought gold would not get lauded for the prudence and foresight, but vilified or even blamed. In the event of crisis, confiscation is a major risk. It's not like it hasn't happened before. You'll be given some crappy paper in return. It could become illegal to own gold.
I'd like to say this couldn't happen here, but it has and it will one day again.
SL: How can an ordinary private investor secure their gold investment against such steps?
DF: Store it overseas is one option. Move overseas is another. Hide it, I guess, is possible, but this is very hard in practice. If the government comes after you for some reason, it's very hard to stand up to them. In practice most don't. But we are a few years from this, so no need to worry just yet. I hope.
SL: With all your insights into the sector, where do you realistically see gold going during the remainder of the decade?
DF: USD 7,000 is looking quite possible.
SL: Besides buying physical gold and storing it securely, investors can also buy the stocks of gold miners and gold explorers. Miners and explorers are two distinctively different options. How would you describe these two different opportunity sets, both in general terms and in the context of current market conditions?
DF: Mining is looking attractive, but it's gold mining, so if it can go wrong it will. Some of the development plays which are just nearing production could get big re-ratings. A lot of deposits that are uneconomic at USD 2,500-3,000/oz might become mines at USD 4,000/oz.
I tend not to bother with the large-cap producers. I like companies with mines that are easy to build.
Exploration is a dangerous business. But if you can find people who know what they are doing, you can have great success. I've just found an exploration play I really like, where the geologist has previously found some 5m ounces in Mexico below surface by identifying and searching out certain formations. These all ran into problems with the Mexican authorities who wouldn't let him develop any of them. But he's now moved into Nevada and Arizona and is convinced his methodology will work there. Meanwhile, his company is trading at its cash value. So I am excited by this "derisked" opportunity.
The reality of exploration is that most don't find anything, and you end up losing your money. Meanwhile, early-stage development plays also tend to discover that actually, their deposits are not worth mining, and so you lose money that way.
But having speculated in mining companies for a very long time and endured vicious bear markets, I can tell you what an unforgiving sector this is to invest in. It looks like we are limping into something of a mining bull market now, but this may be my last. I want to move on to other things.
SL: Despite their recent gains, gold stocks have generally lagged behind the price of gold. This is counterintuitive. Given their high fixed costs and what happens to profit margins once the gold price surpasses a certain threshold, you'd expect gold producers to offer leveraged exposure to the gold price. Why haven't gold stocks lived up to that expectation yet?
DF: Because there are so many ways of owning gold, even with leverage, why take on the extra risk of a company. Miners have been underperforming since 2004 when the ETFs first appeared. This is no coincidence.
Crypto has also sucked a lot of speculative capital out of the sector.
Plus, gold mining has such a long and consistent track record of losing investors money, most feel like me and are done with it.
SL: They say that a mine is a hole in the ground with a fraudster next to it. You and I disproved this notion by backing Condor Gold, which now trades as Metals Exploration (ISIN GB00B0394F60, UK:MTL). The stock took a long time to deliver, but in the end Undervalued-Shares.com readers made 2-5x their money. Metals Exploration's Nicaraguan gold resource is soon to be turned into a highly cash-generative mining operation, which shows that some of these holes in the ground do deliver. However, the sector has long suffered from various adverse factors that held back share prices. For someone who specifically wants to invest in gold explorers (and keeping our learnings from Condor Gold in mind), what's your advice on how to go about finding the right ones?
DF: What a great trade that was!
Metals Exploration has run into a bit of trouble lately, which I am not particularly happy about, but it's been such a winner I am giving it the benefit of the doubt. I'll be writing about it again this week, actually.
But following mining companies is a full-time job. Contacts are everything. Having a broker that knows the space is a good idea. Talking to other investors who know the space. Most people in mining are pretty approachable, though everybody is selling something. Management that have invested a lot in their own companies is generally a good sign. Reading newsletters by people like me is a good idea.
SL: Would it be an option to simply buy a gold explorer ETF? Are there any such ETFs, and what would be the downside in doing so?
DF: Yes. You get less upside, but also less downside. Plus, it saves you the bother of having to keep tabs on the mining markets where there are thousands of companies with new developments (not always positive ones) taking place every day.
NYSE:GDXJ is the most traded ETF, but really most of these are mid-cap producers. There are a couple of funds that specialise in juniors – for example Golden Prospect Precious Metals (ISIN GG00B1G9T992,LSE:GPM), and SVS Baker Steel Gold & Precious Metals (ISIN GB00BNGMZG14), although that is more oriented around large-caps now. These are so small, they are almost as risky as the companies themselves.
SL: Keeping in mind that I'm not an obsessive gold bug (just someone with a general interest in the metal), give me your elevator pitch for why anyone should take the time to read your latest book.
Because it's "Brilliant. Simply brilliant. An absolute eye-opening and incredibly well-written history of gold. I thought I already knew a lot about this subject but now I really do know even more! My only wish would be for this to become required reading in schools everywhere (imagine that!). If enough people read this book, the world will surely change immeasurably for the better! Really excellent!" That's what some dude on Amazon said anyway.
SL: You will keep reporting on gold. Besides buying your book, where can we follow your work?
SL: Dominic, many thanks for sharing your insights. I look forward to the day the two of us embark on an expedition to find the hidden Nazi gold in Bavaria, or the lost Inca gold in Ecuador. Having read your book, I am convinced it's out there!
About Dominic Frisby: Dominic Frisby is a British comedian, author, and voice actor, known for both his satirical songs and commentary on finance and economics.
He has variously been described as "mercurially witty" (The Spectator), having "a genius touch" (The Telegraph) and "all over the place" (The Guardian).
"The Secret History of Gold" is available at Amazon, Waterstones, and all good bookshops.
