Gold is a good investment because it has such low correlation to the broader market. Even though the return of gold is poor, the vol of your portfolio can be significantly reduced.
I actually have a blog post https://cryptm.org/posts/2020/07/09/alt.html where we create a minimum variance portfolio using gold and the S&P 500. And even though gold has high volatility and poor returns, this approach generates a higher risk adjusted return than the S&P 500.
Especially in an age when bonds are no longer countercyclical, gold is an attractive component of a portfolio.
I know that portfolio theory treats the prices of assets like random variables, but I prefer to ground my understanding of asset valuation in human action.
I actually have a blog post https://cryptm.org/posts/2020/07/09/alt.html where we create a minimum variance portfolio using gold and the S&P 500. And even though gold has high volatility and poor returns, this approach generates a higher risk adjusted return than the S&P 500.
Especially in an age when bonds are no longer countercyclical, gold is an attractive component of a portfolio.