Gold’s shine is a mirage

WHAT is more volatile than stocks, with lower returns than bonds? Give up? Gold, the legendary metal nearing all-time highs and generating bullish headlines and forecasts worldwide.

Even the West’s formerly high-flying crypto crowd is enticed by gold’s shiny promises of high returns. Beware: Good gold returns require impeccable market timing – otherwise, long-term pain ensues. If you can’t time stocks, skip gold. Let me empirically show you why.

First, to be clear, I mean individual investors holding gold for the long term, not central banks purchases, like the PBOC’s. The People’s Bank of China has made big gold buys in 2023, including an 18-tonne increase in March. But central banks deal with considerations and time horizons individual investors don’t.