Has gold lost the Midas touch?

Financial journalist and commentator on 3AW and Sky Business
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Some strange things are happening in the gold market – and I don't just mean Wednesday’s fall through the US$1600 an ounce level.

Traditionally, investors have thought of gold as a store of value, a safe harbour in times of economic turmoil. The yellow metal has certainly lived up to that role in the GFC years, rising from US$734.30 an ounce when Lehman Bros. collapsed in October 2008 to an all-time high of $1,923.70 on September 6, 2011.

Since then, gold has lost 18%, as the US “fiscal cliff’ has been negotiated away and the European Central Bank’s “whatever it takes” motto has lessened concerns over Europe. But gold’s historical correlation to investor fear levels is not the whole story.

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