So, given these forces and their role in gold’s current elevated price, how safe is gold as a safe haven asset? That’s the critical question in navigating current markets and requires an examination of history.

An important point to remember: Gold’s reputation does not always align with reality. The notion of gold as an inflation hedge, for example, may not be as ironclad as some believe. With his concept of the “Golden Constant,” Roy W. Jastram (1978) sought to demonstrate that gold’s purchasing power, its “operational wealth,” as he put it, was more or less unchanging over time, in a sense, immune to inflation. Whatever a particular amount of gold could buy 2,000 years ago was about as much as the same amount could buy today.