An enduring, and emotional, allure
Gold is attractive to wear and look at, but even more attractive to own as a commodity these days.
Why all the fuss about gold?Skip to next paragraph
Subscribe Today to the Monitor
That might sum up your attitude about the soft metal if your encounters with it are pretty much limited to your wedding band, the high-end HDMI cable that meant splurging at Best Buy, and late-night reruns of "The Treasure of the Sierra Madre."
It's hard to relate to those gold-obsessed figures from fiction and life, from the pharaohs to the marauding Cortez, the buccaneers to the forty-niners, rap stars to Scrooge McDuck.
And it's not so easy to understand so-called "gold bugs." For that crowd – clamoring again today amid ominous news about governments nearing default – it has that comforting weight. Pulled from the earth, and with inherent worth, gold becomes a stalwart alternative to "fiat currency," promissory paper that might end up worthless. Nobody wants to end up having to use a wheelbarrow as a wallet.
Gold bugs come in different shades. Their motivations vary. To strident proponents of a return to a gold standard for the Treasury, gold represents a hedge against inflation. To survivalist types who stash gold bars behind basement walls, it's a hedge against chaos in the streets. That makes gold's value a kind of "anxiety index," as Jessica Bruder explains in her globe-girdling explanatory piece, which begins on page 26.
If you're holding some of the stuff, then good for you. Maybe keep your voice down. Gold really glitters right now: It passed $1,500 an ounce for the first time in April, and runs slightly above that at this writing – five times its value at the start of the decade.
Of course, past performance, as the financial houses like to say, is no indication of future returns. As an investment, gold is hardly a no-brainer. A little exposure to gold in your portfolio might be just fine, but loading up is a risky play. Gold's value can easily dip – or plunge. The pros watch indicators that are much more arcane than global jewelry demand, though demand is an obvious factor. There's the relationship between gold and oil prices, for example (the commodities tend to rise and fall in tandem).
Still, some deep vein in the human psyche seems almost instinctually bullish on bullion.
"To me, gold is an emotional metal," says David Francis. The best plain-language decoder of monetary mysteries I know, David was the Monitor's economics writer and columnist for more than five decades until his retirement early this year. I got in touch with him one recent afternoon.