An old investment saying confounds the bulls and other market optimists: “Buy gold and hope it is the worst-performing investment in your portfolio.”
Why would any investor buy an asset and hope it underperforms? Because if gold is falling, the chances are that key global equity market indices are doing okay. Or, if US dollar-denominated gold is rising, it is a good bet that equity market volatility is rising and investors want shelter.
Gold’s status as a safe haven or form of insurance is well known, although too few investors, in my experience, understand gold’s role in portfolios and act. Often they equate gold to speculation as “gold bugs” punt on unknown junior explorers.