"As I’ve explained in the past, gold is not now and has never been a play on "CPI inflation". Of course, on a very long-term (multi-generational) basis the gold price will tend to rise by enough to offset the decline in the purchasing power of money, but so will the prices of many other assets. What makes gold special is that it is the premier long-term hedge against bad monetary and fiscal policies. Gold isn’t cheap right now, but in a world that is rife with bad monetary and fiscal policies it is destined to become a lot more expensive." http://www.talkmarkets.com/content/commodities/gold-isnt-cheap-but-nor-should-it-be?post=66409&page=2