The attraction of equities and other financial instruments will rise and fall with the tide, but investors can always bet on one sure thing: as a long-term play, gold will never lose its lustre.
The financial crisis and its aftermath have again proved the point. However, as fund managers and sector experts are quick to emphasise, the yellow metal should not simply be seen as a safe haven when other asset classes are heading south.
No matter the economic climate, gold makes sense as a core holding in any investment portfolio. That applies to central banks as much as to hard-working individuals trying to build a retirement nest egg. And, with an expanding range of choices, including themed funds and exchange traded funds (ETFs), as well as physical gold, private investors can pick a method to best match their wealth and temperament.
"In a world where central banks can introduce measures like quantitative easing, holding real assets definitely makes sense," says Dominic Schnider, head of non-traditional asset class research for UBS Wealth Management. "Also, the price gravity of gold is very limited because you don't have the substitution forces of other commodities."
To illustrate, he notes that should natural gas prices go up quickly, power suppliers could potentially switch to coal. But, while demand and prices for gold will inevitably fluctuate, its appeal and status remain unchallenged.
The latest quarterly report from the World Gold Council makes that clear. It shows third quarter demand at close to 1,085 tonnes worth US$57.6 billion. That represents a 3 per cent jump in demand from the previous quarter, and though 11 per cent down on last year's record-breaking third quarter, the signs still point to sustained long-term demand for coins, jewellery, technology - and gold bars held by banks and ETFs.