Actually, there are three. The third perspective is the one shared by most of the public, investment or otherwise. From this perspective, Gold is not considered at all as either a means to capital insurance/preservation or as a means to capital gain. It is simply ignored completely.
To most people who ARE interested in Gold but who do not have any depth of knowledge of Gold's role in financial and monetary history, this is the minor perspective. This is most easily seen from the fact that there is far more interest in paper claims to Gold - futures contracts, various derivatives, mutual funds and Gold stocks - than there is in the metal itself.
Yet Gold's functionality as a means of financial INSURANCE is by far its most important charactaristic. It is by far the MOST important reason to own Gold, and by that we mean physical Gold in one's personal private possession.
The vast majority of people who own paper claims to Gold, and even most of those who hold the physical metal itself, envisage the time when they can exchange it to advantage for "money". They cannot envisage a situation in which Gold is the asset which will protect them from the ravages of what is used as "money". They simply hope that the time will come when they can exchange it for more units of "money" than they paid to acquire it.
For most of the past twenty-five years since Gold came off its $US 850 highs at the start of the 1980s, even that fond hope has been in vain. While Gold has NOT been in a "bear market" throughout that period, it has always been outperformed by some other financial "asset". From 1982 to 2000, in the US especially, it was the stock market. In the five years since then, in the US especially, it has been real estate. Throughout that period, the exchange rate of the US Dollar has been going up and down like a yo-yo and the purchasing power of the US Dollar (and ALL other paper currencies) has been steadily diminishing. Thus far, however, this steadily diminishing purchasing power has been "gradual" enough to have been accepted by all and not even noticed by most.
Those who HAVE noticed have been intent on placing their Dollars in investments which were going up faster than the purchasing power of the Dollar was going down. These have all been financial instruments and the most popular ones have been the ones in the biggest bubble markets - stocks in the 1980s and especially in the latter half of the 1990s, real estate since the stock market bubble burst in 2000.
What is a "bubble" market? It is a market which is the prime beneficiary of the increased amount of "money" made available by a credit expansion. In the old days, PRICE inflation was often described as "too much money chasing too few GOODS". That ended more than twenty years ago when investors stopped chasing (economic) goods and started chasing paper.
Paper money can be "produced" in unlimited quantities. So can paper claims to various types of financial assets. They have been, and the result is the investment climate of the past quarter century. The most tragic result is the loss of understanding of the DIFFERENCE between money and wealth.
Such events have happened many times before in history, though never to the extent or for the duration of the present episode. All have ended, as this one will end, with the drastic loss of utility of the monetary unit in circulation. Often, these episodes have ended with the complete destruction of the monetary unit in circulation.
From like instances come like outcomes. There is no difference in principle, monetarily or economically, between the "Assignats" of John Law or the "Continentals" of the US of the 1770s/80s and modern paper monies. If you don't know the fate of these, look it up. If you DO know their fate, you know the absolute NECESSITY of holding physical Gold as financial insurance.
Yep, Gold as an investment. Given the fact that before 2002, the last time there was a solid rise ($US 300 - 500) in the $US Gold price was 1985-87, it's not too surprising that its "reputation" as an investment has tarnished somewhat. Further, given the swoops and dives in paper claims to Gold (the way that most people invest in Gold) during its post 2002 bull market, it's not too surprising that most people still don't consider it as an investment at all and those who do consider it too risky.
In $US terms, Gold has hugely outperformed most forms of paper investment over the past nearly five years. The same is true of Gold in most if not all other major currencies. The facts are reported on a weekly basis on this website.
You'd never know any of this by reading the various Gold forums on the net. These forums have been an almost constant illustration of the "wall of worry" up which any viable long-term bull market climbs ever since the $US Gold bull market got started. There is good reason for this. Most posters on these forums are well aware of the antipathy which both governments and paper investment markets have always shown to Gold. The majority of them are veterans of many previous instances when the "powers that be" have got together to smash the Gold price flat, or at least prevent it from rising at the pace that it "should" rise given the real economic situation.
There have, of course, been repeated and blatant instances of the same old same old Gold manipulation during the present Gold bull market. All of them have "worked", but none of them has proved sustainable. This week, Gold has reached new bull market highs in almost every major currency (including at least one commodity currency, the Aussie Dollar) in the world - except the US Dollar.
For the past week, Gold and the US Dollar have been going up together. This is all but unique in the Gold bull market so far. Yes, Gold and the US Dollar did go up together earlier this year, but that was when Gold was still below the bull market high it had set back in December last year. Up until last Friday, Gold and the US Dollar had been going in opposite directions for nearly a month as the $US index rose to break through its 2005 highs and Gold pulled back from its October 2005 bull market highs. This week, Gold has recovered more than half its correction losses - in the face of a still rising US Dollar.
The result has been the new bull market highs in all the US Dollar's "competing currencies". It has also been a recovery in Gold stocks, to the point where the Aussie Gold stocks (as measured by The Privateer's XGO index) are almost back to bull market highs they set late last year.
Over the past quarter century, Gold has performed its premier function, that of financial INSURANCE, wherever there has been a currency crisis. There have been LOTS of those over that period. It has not yet had to do so in the US and most of the other major developed nations because they have not YET been hit with such a crisis. They will be. In the meantime, Gold is in long-term and very well established bull markets in terms of ALL world currencies.
What more can be desired from Gold, either as a form of financial insurance and/or as an investment?