Gold is supposed to be a safe haven. The oldest store of value in the world, used to protect wealth for more than 4,000 years. The asset that is supposed to help investors sleep at night. So how come it plunged about 20 per cent? That is not preserving wealth. That is destroying it.
The truth is that gold is a strange kind of safe haven. And at times, it can be a very dangerous one indeed.
Gold has had a stunning run lately. Last year, the price surged 65 per cent to end the year at about $4,310 an ounce, according to BullionVault. Silver did almost as well, climbing more than 40 per cent to about $40.
We have to go all the way back to 1979 to find a bigger annual jump in the gold price. Fears over the Iranian revolution and the Soviet invasion of Afghanistan saw gold rocket more than 133 per cent to a then-record $850.
What's behind the global gold rush? 05:51
The price quickly collapsed back to about $200, and did not recapture that earlier peak for almost three decades. Gold does not always shine.
The millennium, by contrast, has been brilliant for the yellow metal.
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