When gold prices surged by 7% in 2026, drawing global investors into a frenzy of hoarding, Howard Marks, co-founder of Oaktree Capital, doused the market with cold water: 'The idea of gold as a 'store of wealth' is self-deception, nothing more than a collective delusion akin to the Emperor's New Clothes!' This legendary investor managing $190 billion in assets directly exposed gold's fatal flaw—no cash flow, no fundamental basis for pricing. Even amid geopolitical turmoil and rampant central bank gold buying, the entire phenomenon is ultimately just a bubble propped up by faith.
Who would have thought that gold, revered as the 'safe haven' by many, is seen by experts as so unimpressive? Mark's criticism is not alarmist but hits at the core paradox of gold investment: stocks can generate dividends, bonds can yield interest, real estate can produce rental income—these assets have their value precisely calculated through cash flows; but what about gold? Aside from looking nice on display, it neither generates interest nor creates value, and its price depends entirely on the subjective perception of 'how valuable it is.' As he said: 'You can never calculate the fair price of a gram of gold—it's no different from guessing the value of a stone.'
Historical data has greatly debunked the myth of 'gold's resistance to decline'. Max specifically pulled out the example from 2008: at that time, Brent crude oil soared to $147 per barrel due to 'supply shortages', mirroring the current geopolitical hedging of gold; however, when the financial crisis erupted, oil prices plummeted directly to $40. Gold didn't fare much better: during the economic boom from 1989 to 1999, gold prices fell by 27%; after peaking in 2011, it took 5 years to drop 45% from that high. Those shouting 'buy gold during a crisis' may have forgotten that when a real black swan arrives, even faith can collapse, and gold cannot escape the fate of a crash.
What hurts more is the comparison of returns. Over the past 40 years, the S&P 500 has had an annualized return of 11.5%, with an inflation-adjusted return of 8.4%; the 10-year US Treasury has an annualized return of 5.2%, and after inflation, it's only 2.3%; and gold? Its annualized return is only 3.8%, and after inflation, it’s just 0.9%, even worse than bonds. The 7% increase in 2026 looks impressive, but it’s merely a pulse of short-term emotional speculation—central banks buying gold and geopolitical conflicts are merely 'unsustainable catalysts'. Once market sentiment cools, gold prices lacking intrinsic value support will ultimately revert to their true nature.
But the most ironic thing is that the 'myth' of gold is still being collectively pursued. In 2025, central banks' gold purchases will hit a historical high, and ordinary investors are frantically buying, pushing gold ETF holdings to record highs. However, smart money has quietly retreated: data shows that in the past month, global hedge funds reduced their gold futures positions by $2 billion, with giants like Oak Tree Capital stating they 'will not allocate space for gold in their portfolios'. The logic behind this is simple: assets supported by faith can rise as crazily as they can fall terribly.
In my view, Max's criticism does not deny all value of gold but rather wakes up those blindly following trends: gold has never been a 'stable investment' but rather an 'emotional speculation'. Its value exists only in the consensus of 'everyone believes it has value'; once that consensus breaks, it leads to a bottomless abyss. For ordinary investors, the real concern should not be gold itself but the obsession with treating it as a 'wealth storage tool'.
So, how should ordinary people respond? Don't rush to sell the gold in your hand, and don't blindly chase after high prices:
• Position control is key: gold can serve as a 'ballast' to hedge against extreme risks, but its proportion must never exceed 5% of total assets; don't put all your eggs in the 'faith basket'.
• Prioritize compliant channels: avoid niche gold tokens and high-leverage gold products; if you really want to allocate, choose physical gold or large-scale, liquid gold ETFs.
• Don't be fooled by short-term gains: the 7% increase in 2026 is likely driven by geopolitical emotions in a short-term market; in the long run, assets that can generate cash flow, like stocks and bonds, are the core of wealth appreciation.
Ultimately, the myth of gold has never been based on value but on fear. Although Max's words may be harsh, they reveal the essence of investment: true wealth storage relies on the earning capacity of the assets themselves, not on collective blind faith. When everyone is celebrating gold's 7% increase, perhaps it's time for calm reflection—how long can this 'emperor’s new clothes' type of speculation last?
Last question: do you plan to hold the gold in your hand for the long term or take profits when the opportunity arises? Do you agree with Max that 'gold has no intrinsic value'?