One of the best arguments for gold, as an investment, is it’s longevity. The three wise men didn’t bring Bitcoin, frankincense, and myrrh to Bethlehem. Times change, or better said, people change.
If there was ever a year that gold should have done well, given its inflation-fighting credentials, it was 2021. As Michael Batnick at the Irrelevant Investor wrote:
The last few years saw a record amount of money printing and inflation like we haven’t experienced in decades. Gold enthusiasts could not have teed up a fatter pitch.
Gold whiffed on the pitch. As Mark Rzepczynski at Disciplined Systematic Global Macro Views wrote:
Gold should have been one of the great hedge investments for a pandemic and for a period it was until the end of summer 2020. Since then, it has been sinkhole for those fearing inflation and uncertainty.
It just goes to show you that markets are hard. Ben Carlson at A Wealth of Common Sense writes:
If you would have told someone this year would include hundreds of thousands dead in a prolonged pandemic, an attack on the U.S. Capitol, massive government spending and the highest inflation in almost 40 years, buying gold would seem like a reasonable conclusion…You could have nailed the macro going into this year and still lost money.
It may be premature to write off gold forever. But before the past few years there wasn’t a digital version to compete against gold. Times change, markets change and most importantly people change. The challenge is recognizing when they do in real-time. Not decades later.