Why gold isn't dead

Unlike the editor of this magazine, I have been a big votary of investing in gold over the years. This advice is subject to the corollary that you shouldn't bet your life on it and at best have 5 to 10 per cent of your portfolio in gold. Investing in gold is essentially an insurance against all hell breaking lose in the global financial system. Central banks have printed money at a very rapid rate since the start of the financial crisis in September 2008 and continue to do so. And as much money as has been printed can only lead to inflation - someday. At least that's the logic I have had to offer every time I have written a column on gold, up until now. I need to admit here that between 2008 and 2011, this advice was influenced by numerous gold bugs I interviewed as a personal-finance journalist. Each one of them gave me a huge forecast on gold. One of them even said that at its peak gold would touch $55,000 per ounce (one ounce equals 31.1 grams). Nothing of that sort has happened. So what was the trick here? None of them gave the time frame by when the price of gold would shoot through the roof. Hence, for all we know, they might still prove to be right. As I write this in mid-September 2015, the price of gold is a little over $1,100 per ounce, having crossed $1,900 per ounce four years earlier, in September 2011. The global economy has gone from one economic crisis to another. There have been economic problems in Europe. And now China seems to be joining the bandwagon as well. Nevertheless,

This article was originally published on October 30, 2015.