By Goehring & Rozencwajg
Gold is no different than any other asset class: it becomes popular, rises in price, is overvalued, and ultimately represents a poor investment. Other times, it undergoes periods of investor disinterest, suffers sustained price declines, becomes undervalued, and ultimately represents an excellent investment.
We are not gold bugs. Over the long term, gold protects monetary debasement; however, unlike equities, gold will provide little real return. If an investor can identify periods when gold becomes extremely undervalued, it can offer exceptional excess returns, often uncorrelated with other financial assets.