Why We Still Believe in Gold

Gold, which John Maynard Keynes called the “barbarous relic”, has become so eagerly sought that even Costco has got in on the business. Perhaps this newfound fascination shouldn’t surprise us. For those looking to build nest-eggs, gold is easier to understand than stocks or bonds, since you can literally hold it in your hand. Moreover, of late, this most ancient of assets has been outperforming most other classes. Bonds have been tanking, real estate is sluggish and even the on-fire US stock market, up about 6% since the start of the year, falls short of the double-digit increase gold has managed in that time. Former British Chancellor Gordon Brown must surely regret, 25 years ago this month, selling off more than half the nation’s gold reserves at such a measly price.