Many Happy Returns Gold is a Terrible Investment (And Why You Should Own It)
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Sep 17, 2025 Gold may not generate income, yet it fascinates serious investors. The discussion tackles its recent price rise amid geopolitical tensions and evaluates its role as a safe asset in times of crisis. Insights reveal that 10% to 30% gold in portfolios can help during downturns. The complexity of physical versus paper ownership is explored, particularly the accessibility challenges faced by investors. Myths about gold’s value are debunked, prompting critical questions about its future in an evolving market landscape.
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Long-Term Drawdown Ended
- Gold has been in a real-terms drawdown for roughly 45 years until its recent breakout in 2023.
- A blistering rally pushed it to a new inflation-adjusted high, challenging its long-term lagging reputation.
Central Banks Are Key Buyers
- Central banks have been major buyers of gold recently, adding over a thousand tons annually in recent years.
- Geopolitical tensions and 'weaponisation of the dollar' drive some countries toward gold over US treasuries.
Gold’s Crisis Hedging Role
- Gold often acts as an insurance hedge in crises, holding up when equities and bonds fall together.
- Its crisis role stems from being an international asset with deep psychological demand.
