What’s reason behind gold’s poor performance?

Gold prices are wrapping up, even having endured an important announcement from the federal reserve and the first optimistic us jobs report in nearly a quarter.

The supply of gold is largely static from one period to the next. Gold mines are large and plentiful, but almost the entirety of what they produce is wasted. As a long-standing commodity, gold is not a security for the speculative. No one, or at least no one sane, buys physical gold in the hope that it will sextuple in value over the next year. Moreover, speculation is one reason for changes in gold prices. Investors speculate as to what governments and central banks are going to do and then act accordingly. It’s tempting to think that gold represents an objective measure of wealth. However, it is not. Gold’s value rises and falls just like any other investment.