For those who think it is the “only real money” as well as those who, with Lord Keynes, consider it a “barbarous relic,” gold retains its fascination. Over the past decade, however, it has been a poor investment because its dollar price has generally declined. Much of this decline can be traced to concerns over gold’s future role in the world monetary system. Central banks hold over one-fourth of the total gold supply, so their actions—and rumors about their actions—have a significant effect on gold prices.
Suggested citation: "Gold," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-11, pp. 07, 11.01.2000.