Barron’s

Gold is finally glittering—and don’t be surprised if it continues to shine. Gold, remember, is supposed to be a store of value, and has kept up with inflation over the long term. As Andrew Bary noted in our September cover story on gold, an ounce would have bought a good men’s suit in 1918, and still does today.

Gold can also act as a buffer in tough times. While the S&P 500 has tumbled 16% during the past three months, gold has gained 8%, acting as just the hedge against market chaos that investors hope for when they buy it. The SPDR Gold Shares exchange-traded fund gained 1%, to $120.86, on Thursday, while the VanEck Vectors Gold Miners ETF climbed 1.5%, to $20.93.

That role as insurance from market volatility was also apparent in currency markets. In 2018, gold outperformed every Group of 10 currency except the Japanese yen, the U.S. dollar, and the Swiss franc, observes Société Généralecurrency strategist Kit Juckes: “Fair to say, then, that it’s mixing it with the safer-haven crowd.”

Given continued uncertainty in currency markets, there’s a good chance that gold prices keep rallying. The dollar won’t look great in a slowing U.S. economy with a large fiscal deficit. Meanwhile, the euro looks cheap relative to the dollar, but the main argument for that is that the news out of Europe can’t get much worse—not a great reason. “The reason for thinking positively about gold at the moment is that we have deteriorating dollar fundamentals and an absence of reasons to like pretty much any other currency,” Juckes writes.