Is Gold Overrated?

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Gold has been touted as the last true currency – but that doesn’t mean it will rise indefinitely or even maintain its value. In fact, compared to other major asset classes, gold has fallen. Over the past year, gold has failed to beat global real estate (NYSEARCA:RWO) U.S. stocks (NYSEARCA:VTI), and long-term U.S. Treasuries (NYSEARCA:TLT). (See table below)
The biggest unpleasant surprise for gold investors might be this: Despite Europe’s sovereign debt crisis, Eurozone stocks (NYSEARCA:VGK) have outperformed gold by 10.23% over the past year! 
Curiously, gold’s lackluster relative performance hasn’t stopped its cheerleaders from singing and dancing. HSBC forecasts $1,900 per ounce for gold by year end and Merrill Lynch predicted $2,000 with another round of Fed stimulus. Other pie in the sky gold forecasts – not worth mentioning are everywhere.  
Silver has been one of the few asset classes that gold has managed to recently beat and a glance as the gold/silver ratio shows this.
The gold/silver ratio has surged ahead by 28% year-to-date, indicating that gold has performed better relative to silver. ... Continue to read.

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