Been looking at gold as a hedge against my forex positions lately.
Everyone talks about it like some magic store of value but I’ve seen it drop pretty hard during certain market conditions.
Wondering if there are actual periods where gold consistently loses value or if the long-term trend really does stay flat.
Gold can lose value, especially when the dollar gets stronger or real interest rates rise.
Periods like the 1980s to early 2000s were tough for gold holders.
It may also drop sharply during liquidity crunches when cash is needed quickly.
It’s not a foolproof safe haven.
Gold drops when market shifts or uncertainty fades.
Gold definitely loses value during specific cycles. I’ve watched it get crushed when central banks tighten policy aggressively or when recession fears turn into actual economic strength. The 1990s bull market killed gold for years. Rising productivity and falling inflation made bonds and stocks way more attractive. As a forex hedge, gold works sometimes but fails when you need it most. During March 2020, everything sold off together including gold. Dollar strength usually trumps safe haven demand in the short term.
Gold lost like 20 years from 1980 to 2000. Not really constant at all, just better than most stuff long term.