Gold has lost its glitter. Does that mean it’s time to buy?

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

In February, I walked past a bullion dealer in the Sydney CBD with a queue that wrapped around the corner. Gold had just peaked above $US5600 ($7800) an ounce, capping a 12-month run of more than 80 per cent.

Six months later, the queues have gone, gold sits near $US4600, and the question I get from investors has inverted. It used to be: “How high can this go?” Now it’s: “Why did my safe haven fail me during a war?”

It is a fair question. Gold’s first half was a disappointment, but unlike how many investors would paint it, nothing about it was mysterious, nor did it reveal any fundamental flaws in gold.

Consider the starting point. At the beginning of this year, gold had been perhaps the best-performing major asset on the planet for three years, at one point rising more than 60 per cent in six months.

When an asset climbs that fast it attracts a particular kind of buyer – the one who arrives because the price is rising, not because of any particular thesis. Those buyers set the price at the top and are the first to leave.

Then there is the conflict itself. The Iran war has been the most energy-centric war in........

© The Sydney Morning Herald