In January of this year I wrote about gold as an investment. In that article I pointed out what a losing proposition buying gold as hedge against inflation or as an investment vehicle in general was a losing proposition when compared to well, just about anything else once inflation is taken into account.

Well, over the last few weeks, we have seen gold pull back from its highs in lock step with the improvement of the US dollar and the drop in oil prices. I used to get the calls and emails about how buying gold was the best play because it was soaring to new heights. (Sorry, I can’t duplicate the breatheless excitement the callers all seem to share in written form.) Now, I get calls and emails saying you should “buy on the dip!”

But, this isn’t a dip. Gold is a complex commodity trade with many variables affecting its immediate delivery price as well as its future delivery price. Those variables afford the experienced commodity trader a profit opportunity. But, the basic, investor on the street, would be better served with a good ETF. Heck, even a basic money market account would be a better choice for many of the people I know who bought gold, in some cases for over $900 an ounce. This morning, gold is under $800 an ounce.

Professional monetary traders don’t run to gold as a hedge against anything, no matter what the gold gurus claim to the unwitting masses. When one currency falls out of favor they “run” to another currency. It is the price differential between floating currencies that afford them a profit opportunity.

Gold is sexy to the amateur because it is, well, gold. Hey, if you like gold, buy gold, but don’t try to justify it to me as an “investment”.