Malkiel

Gold Should Continue To Gain vs. Paper Assets

Gold is in the unenviable position of being a commodity whose holders can all wake up on the same morning realizing the metal has no industrial use and is basically worthless except to sell to the unsophisticated who think it somehow magically "holds value" against falling currency. The performance of gold in the February correction gave the lie to any thought that it was going to hold value "like the '70's" when financial instability comes. The "bull market" in gold ended in February when it failed to do its duty and has been stuck in a narrow trading range since then. The best hedge against falling currencies are some form of position in commodities like corn, steel, oil, etc., in today's global economy.