Youve seen it all over, money has no real value because of the actions of central banks. The story keeps growing and there seems to be no stopping it. In a world where the governments paper is not to be trusted gold is once again king. People are investing in the yellow metal en masse because they believe it will hold its value despite macroeconomic conditions. Heres why theyre wrong.

1) You dont know how to value it

Theres only one really good way to invest. You find something thats priced less than what you think its worth and you buy it. When everybody else catches up to you, its time to sell and find something else that nobody values correctly. The problem is that nobody knows how to value gold, and neither do you.

Dont get caught in a trap built by fund managers for their own edification. If you cant put a price on what you think gold is worth, and if youre honest with yourself you cant, you should not invest in it.

2) Inflation just isnt happening

The major argument to invest in gold is that the metal holds its value in inflationary periods. The Federal Reserve is finished its money-printing bender, and inflation still hasnt happened. In fact, its below where the federal Reserve wants it, and thats causing its own problem.

Inflation isnt happening and, though theres no guarantee that its going to stay away forever, theres no good analysis that says its coming back. Forget what the fund managers are telling you, inflation is not guaranteed, and gold isnt even the best way to bet on it.

3) Demand comes from consumption

Demand for gold is held to be an inexorable reality. People always want it according to those fancy ads, though they offer little proof. The reality is that theres two major places that demand for gold comes from: investment and consumption.

The surge in the price of gold in recent years has come majorly from the increase in consumption from India and China, where jewelery has become much more demanded on the back of growing economies. Should this trend collapse, and given recent moves in China and India that reality may not be far away, demand will disappear and the price of gold is guaranteed to fall.

4) How are you going to store it?

If youre buying gold because you dont trust the government, why do you trust the GLD ETF, or a bank to store your gold for you? Unless you take the risk to actually keep the gold on your property, something which makes it a very risky prospect indeed.

Youve got to pay to store gold, with ETFs thats covered in your expense ration. If you store it yourself you take the risk and pay the cost in the risk of losing your stored wealth. Gold needs to be stored and you have to pay for it somehow if you want to invest in the metal.

5) Theres no such thing as “real” value

The arguments for buying gold revolve around the idea that it has real value because its been used for thousands of years as a currency. That was true, to some extent, up until Richard Nixon abandoned it as the linchpin of the Bretton Woods system in the 1970s. Its no longer true and theres no such thing as real value.

Value comes from demand and supply, theres no such thing as inherent worth in a metal. Gold is no longer currency and its not likely to return as such. What has real value is something that generates value by itself. Businesses do this, as do productive assets like oil wells. Gold produces nothing. You dig it up, and bury it somewhere else and hope it increases in value in between.

6) If everybodys saying it youve already missed out

In order to make real money investing, you need to be ahead of the curve. If theres advertisements all over the internet and television advising you put gold in your safe, youre already behind the majority of investors. Thats not to say that it cant make money, theres a chance that it can.

Gold is a bad investment because everybody has already heard of it. If you want to make money for your retirement, or provide for your family you need to put the work in. any investment you hear about from an ad has huge vested interests behind it, and they simply dont care whether you make money or not.