The article thus opined that “if shares prices fall as the world's central banks tighten monetary policy, gold might not benefit” or that “gold could suffer if shares fall on account of fears of a double-dip recession.”

That said, the take-home lesson of the IC findings is that –regardless of what we might want to call gold: “safe-haven” (or not, as shown by its curious relationship to the VIX), the “ultimate currency” (or not, as the occasional mass stampedes into the dollar reveal), or just “plain-vanilla insurance” against the unpredictable world in which we live (the one label this particular writer chooses to go with), it has a valid place in one’s basket of assets. The idea is not to get carried away with false expectations, however. Thus, the IC’s Chris Dillow concludes that:

“None of this means gold has no place in a diversified portfolio. It does, as it has low correlations, on average, with gilts and equities. A low correlation, though, is a different thing from a strongly negative correlation.”

Jon Nadler is Senior Analyst, Kitco Bullion Dealers Montreal

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