By Costas Bocelli
Seeking Alpha
Ever since gold prices peaked around $1,900 an ounce three years ago, holding gold and gold related securities has been an utter disappointment.
There are many reasons why investors are attracted to the precious metal. The biggest one, of course, is that gold historically has served as a store of value and a hedge against inflation and dilution of fiat currency.
And the big run-up to $1,900 was largely fueled by the Fed’s response to the credit crisis and the great recession. The central bank slashed interest rates to ZERO and began printing trillions of dollars of reserves that, in turn, flooded the banking system with massive amounts of liquidity.