By Richard Meadows
I should have seen this coming. Last week's column, which discussed the possibility of a bank failure, brought the gold bugs crawling out of the woodwork.
Gold enthusiasts love doom and gloom. When the world is looking especially chaotic, they rub their hands with glee. Economic collapse or a Donald Trump apocalypse would be great news for the price of gold, sending investors scrambling to buy it up.
Gold is the currency of fear, favoured by those who don't trust banks, paper currencies or governments. A big old nugget of gold has a reassuring solidity to it. A thousand years from now, you know it'll still be there. It's a cold, metallic security blanket.
For this reason, gold is sometimes considered a 'safe haven' investment. As we learned last week, there's no such thing. What's really surprising is just how volatile the precious metal is.
Gold bugs have had a white-knuckle ride in recent years. The financial crisis sent the price soaring from as low as US$733 (NZ$1041) an ounce to around US$1900 a few years later. Analysts reckoned US$5000 was surely on the cards. Then the price crashed, bottoming out just above US$1000. Now it's climbing again.
Investing in gold can make you very, very rich. If you time it right, your pockets will be so full you'll have to hire two assistants just to hold your pants up.
Investing in gold can make you very, very poor. If you time it wrong, you'll count yourself lucky to still own a pair of pants.