NEW YORK ( TheStreet) -- Gold's stunning 9% drop on Monday has many declaring that the yellow metal's 12-year bull run is officially over. In the past year, the price has fallen nearly 16%, and now stands at the lowest level since February 2011. Technicians will tell you that the gold price chart looks downright ugly, and that there may be further damage done in the near future. That may well be true, but my perspective on gold is a bit different.
First of all, gold is not an investment, in my view. It's insurance against uncertainty, a hedge against inflation and a store of value. In times when there is little uncertainty, and inflation is not a threat, you would expect the price to be relatively low as it was for much of the late 1990s.
As an investor, you'd hope for those conditions, because all in all, it would signal economic stability, rising markets, and solid performance from your portfolio. With gold representing a small piece of that pie, investors would happily accept falling gold prices in exchange for growth in the other asset classes in their portfolios.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV