Many of you still hold gold as a protection against bad times. This is wise, as the metal might well hold up if or when the US economy goes into recession.
My chart shows the point. It plots the three-yearly change in the gold price in sterling terms against three-yearly changes in US industrial production: the latter is inverted so recessions are high points on the line. It’s clear that there’s a correlation between the two. In bad times such as 2000-03 or 2006-09 gold does well. But in economic expansions such as the late 1990s or mid-2010s it does badly.