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Why Are Precious Metals So Highly Sought After?

From the jewelry of ancient pharaohs to modern investment instruments, gold has been a symbol of prosperity and a store of wealth for thousands of years. Why does this precious metal remain a favorite among investors?

Precious metals, especially gold, never lose their appeal. In times of economic turmoil, war, and inflation, gold actually shines brighter. Statistics Indonesia (BPS) recorded that in October 2025, gold jewelry was the largest contributor to national inflation, reaching 52.76% year-on-year. This is not just about price — it reflects a growing public awareness of the importance of gold investment.

So what makes precious metals so special? The answer lies in their long history, inherent scarcity, and status as a safe haven in times of uncertainty.

52.76% Gold jewelry's contribution to national inflation (Oct 2025)

20% Increase in PT Antam gold sales (2025)

56.7% Gold investment return in Rupiah (2025)

28.19M Capital market investors in Indonesia (June 2026)

A Journey Through Civilization: Gold Since Ancient Times

The history of gold is the history of civilization itself. Long before paper money existed, humans already knew and valued this precious metal. Raw gold nuggets have been found in Spanish caves dating back to 40,000 BC, but the structured use of gold as a medium of exchange began thousands of years later.

The ancient Mesopotamians around 2,600 BC began developing methods to forge gold into jewelry, while the Egyptian civilization around 3,600 BC had already discovered smelting techniques. A major milestone occurred in 600-625 BC in the Kingdom of Lydia (modern-day Turkey), when King Croesus minted gold coins as officially recognized currency. This was one of the first steps toward gold becoming a standard of economic value.

"Around 3000 BC, people in Mesopotamia began minting coins from precious metals like gold and silver. This facilitated transactions because coins were widely accepted as a means of payment and had intrinsic value that could be determined." — Niall Ferguson, The Ascent of Money

Thousands of years later, gold remains the standard. The complicated barter system — with its double coincidence of wants problem and difficulty determining equivalent value — was gradually abandoned. Gold and silver became the solution. Their intrinsic value, durability, and scarcity made precious metals a universally accepted medium of exchange.

Why Has Gold Become an Investment Staple?

If gold was once a medium of exchange, today it is a highly sought-after investment instrument. Gold has a negative or low correlation with risky assets like stocks. This means that when the stock market falls, gold prices tend to rise. This is the function of diversification and hedging that makes gold so strategic.

In Indonesia, gold serves a dual role: protecting against domestic inflation and the weakening of the Rupiah against the US Dollar. Even if global gold prices stagnate, a 10% Rupiah depreciation will increase the value of your gold in Rupiah by roughly 10%. Few assets offer this kind of value protection.

📈 Recommendations from Financial Masters

Figure	Gold Allocation Recommendation	Reason
Ray Dalio (Bridgewater)	7.5% – 15%	Protection against currency devaluation and monetary crises
Kevin O'Leary (Shark Tank)	5%	"Insurance policy" that is non-negotiable
Jim Cramer (Mad Money)	Up to 10%	"Insurance against chaos" and inflation
Mark Mobius (Mobius Capital)	10%	Asset with no correlation to financial markets

Global financial experts agree: gold is a must-have asset in any portfolio, though the allocation varies.

Gold Bullion vs. Gold Jewelry: Which Is More Profitable?

Many people wonder which is better for investment: gold bullion or gold jewelry? The answer depends on your goals.

📊 Comparison of Gold Bullion and Gold Jewelry

Aspect	Gold Bullion	Gold Jewelry
Purity	99.99% (24 karat)	70–91% (10–22 karat)
Production Cost	Minimal, price reflects metal value	10–20% design & craftsmanship cost
Resale Value	Close to market price, small spread	Lower due to manufacturing cost deductions
Certificate	Comes with official certificate (Antam, LBMA)	Store-dependent, not standardized
Function	Pure investment instrument	Investment + aesthetic value

💡 Conclusion: Gold bullion is superior for long-term investment due to its high purity, price stability, official certification, and good liquidity. Gold jewelry is suitable for those who want to combine investment with aesthetic and wearable value.

The Latest Innovation: Gold ETFs and the Future of Investing

Good news for investors! Starting in the second half of 2026, Gold Exchange Traded Funds (ETFs) will be available on the Indonesian capital market. This is a major breakthrough that allows investors to invest in gold easily, safely, and transparently through the exchange mechanism, just like trading stocks.

This product will use Electronic Gold Receipts (EGR) — digital proof of gold ownership backed by physical gold stored at Pegadaian (the state pawnshop). In other words, every gram of digital gold is fully backed by physical gold in the vault. Not only does this facilitate access, but Gold ETFs could also potentially be used as collateral through Pegadaian's Securities Pawn product.

Interest in Gold ETFs is remarkably high. An internal IDX survey shows that this is the most anticipated new investment product among Indonesian investors. With the number of capital market investors jumping from 7.49 million (2021) to 28.19 million (2026), the potential for the Gold ETF market is enormous.

"Through Gold ETFs in the domestic market, investors now have an alternative instrument that allows them to invest in gold easily, safely, and directly through exchange trading mechanisms, just like trading stocks." — Selfie Dewiyanti, Director of Pegadaian

Conclusion: Gold — A Timeless Asset for the Future

Precious metals have been part of human civilization for thousands of years. From a medium of exchange in Mesopotamia to modern investment instruments like Gold ETFs, gold continues to prove itself as a timeless store of value. Amid geopolitical uncertainty and inflation, gold is a reliable wealth protector.

Whether you choose gold bullion, jewelry, or Gold ETFs, one thing is certain: gold is an asset that should be part of your investment portfolio. Don't follow the crowd without a clear allocation strategy. Learn, understand, and align it with your financial goals.

📚 Sources & References

1. RRI.co.id (2024). Understanding the Evolution of Trading Systems from Ancient Times
2. ANTARA News (2026). KSEI and Pegadaian ready to implement Gold ETFs in the second half of 2026
3. ANTARA News (2025). BPS: Geopolitical conditions drive gold price increases
4. CNBC Indonesia (2025). What's the Ideal Gold Investment Allocation? Robert Kiyosaki-Ray Dalio's Calculation
5. Bisnis.com (2025). Comparison of Investment Returns: Gold Bullion vs. Jewelry
6. Pikiran Rakyat (2024). When Did Humans First Recognize Gold?
7. Bisnis.com (2026). Gold ETFs Ready to Launch in Second Half of 2026
8. RRI.co.id (2025). BPS Reveals Causes of Gold Price Trends
9. Kompas.com (2025). Gold Increasingly Strategic as Portfolio Diversification
10. Sahabat Pegadaian (2025). Why Is Gold Bullion More Expensive Than Gold Jewelry?

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