Gold: what role is it playing?

No operating earnings

Gold does not produce business profits or rental income. Its investment result depends on price changes and the costs of holding or trading it.

The form matters

Jewellery can include making charges. Physical holdings need secure storage. A fund has its own fees and structure. These differences matter when comparing two gold purchases.

More than one price driver

Currency moves, interest rates, demand and uncertainty can all influence gold. It need not rise every time inflation rises or markets fall.

My takeaway

The first question is what job gold is meant to do in the wider picture. That is more useful than assuming it will always protect against every kind of loss.

Further reading

• Investor.gov: investing basics ↗