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Own Gold? Here's Why It's Time to Sell

Stocks in this article: GLD

BALTIMORE ( Stockpickr) -- "He who has the gold makes the rules." Hmmm. Somebody had better tell Mr. Market.

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Since 2008, gold has been a safe haven investment for scores of investors. Every concern during the height of the financial crisis seemed to be solved by everyone's favorite precious metal.

Worried about inflation? Buy gold.

Worried about how the dollar will perform versus other currencies? Buy gold.

Worried about a zombie apocalypse? Buy more gold.

But in 2013, gold's safe-haven status is coming into question in a big way. Worse, it's pointed considerably lower from here; so, if you still hold the yellow metal, it's time to hit the sell button. Let me show you why.

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First of all, I'm sure that I'm ruffling some feathers by saying that gold's a sell. The amount of emotional attachment that some people have for gold is absolutely incredible -- but I get why the gold bugs like the metal so much. After all, it's treated them pretty well over the last decade.

Since 2003, gold prices have rocketed more than 223%, providing a whole lot of returns in a very tough market. Maybe even more strikingly, gold actually gained value in 2008 (when stocks were shedding more than 36%) and then went on to match the S&P's bounce-back performance in 2009.

You would've had to be nuts not to be enamored with gold back then. But things look very different right now.

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What's The True Value of Gold?

Gold bugs might want to stop reading right now. This part is going to be a little unpleasant.

Fact is, gold doesn't have any fundamental value -- or at least very little. It's got precious few industrial uses (unlike silver, for instance). And those it does have become more specious at high prices where substitutes become comparatively superior.

You can't eat it (well, with the exception of Goldschlager, I suppose), and it's pretty worthless for building, hunting or transportation.

Sure, there's a finite amount of gold on this planet. But scarcity alone doesn't give an asset value; if it did, 8-track copies of Barbara Streisand's Christmas album would be selling for more than $2.99 on eBay. Sometimes, stuff is scarce for a reason.

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