The lower gold goes the safer I feel since it thrives on the world's woes.

And goodness knows there's enough going on, or not in the case of global growth, to keep a worrywart in gainful employment.

So what good thing is happening for it to be dropping, I wonder? I'd like to think it's because inflation is nowhere in sight, despite all the money  being printed by central banks to prop up their economies – something, touch wood, that won't be our fate.

In fact it has lifted prices, but only the good ones. Share and property values have been buoyed and it's put a floor under plunging commodity prices, including gold.

Also the bond market has been saying for ages inflation is, as Prime Minister Tony Abbott would say, dead, buried and cremated. He'd probably repeat it too.

So it's hardly a new revelation.

That's why I suspect gold's recent falling out of favour has more to do with the fact that the US Federal Reserve is getting closer to raising rates for the first time since the GFC.

This will suck US dollars back to the homeland lured by the higher return – or really to get any return at all, since the official rate is near zero – and perhaps the reassurance that growth must be pretty strong or the Fed wouldn't be contemplating a rise.

A stronger US dollar almost invariably drags down gold because that's what it's priced in. When US dollars are more valuable, fewer are needed to buy the same amount of gold so its price drops, though not always. Changes in market sentiment, which is to say some new panic, can send gold flying off on its own irrespective of what its home currency is doing.

And sure enough bullion's, er, golden era in the aftermath of the GFC came when the US dollar was on the ropes.

But from its $US1900 an ounce record four years ago, gold has dropped 42 per cent, though in Australian dollars the slide is a more modest 16 per cent.

Even so, there's no disguising the fact that gold is a lousy investment most of the time.

To its credit the return could have been even worse since it doesn't do much, apart from look pretty. It's not as if it pays interest for instance. On the contrary, there can be insurance and holding costs and there's also the lost income you could have been getting.

The joke is bullion hasn't even proved itself against inflation.

Even hitting $US1900 an ounce, which didn't last long, was a lame effort considering it was still a good $US300 short of its last record in 1980, when you take inflation since then into account.

For gold fantasists it's never bullion that's the problem but paper currencies. Something costing a dollar 30 years ago would today sell for $2.70, which is the same price after allowing for inflation. The way they see it, the dollar has shrunk to 37 cents, proof of paper money losing value.

That's true, but it's no argument for the merits of gold except perhaps that it's better than stashing cash under the mattress for 30 years.

If you'd bought some gold back then and hoarded it you'd have about $300 an ounce more purchasing power today. Great, but not enough for you to retire early, I imagine.

Besides, even the interest from a succession of term deposits – no fast-track to wealth I can tell you – would have left you almost three times better off. Mind you, that's before tax.

Yes, if you'd sold gold at its peak the maths would look much better but even then it's no comparison against the returns from shares and property which, remember, also provide an income along the way.

One thing I'll say for bullion is that it's doing better than that other speculative wanna-be currency, Bitcoin, which doesn't pay an income either and comes with a commission when cashed in.

Apart from silver, also in the doldrums, Bitcoin must be the strongest competition gold has faced as an alternative currency in, I don't know, 6000 years. But it's dropped 55 per cent in a year.

And there's something to be said for the way gold has, well, attitude. Many financial advisers even recommend holding about 5 per cent of your investments in bullion for that very reason. It's like insurance – when everything else is down there's a chance gold will be up.

But what about gold stocks?

Their problem is they tend to move with the rest of the market in big corrections which rather defeats the purpose.

Besides, without a big drop in the dollar the gold price is getting dangerously close to the cost of digging it out.

@moneyPOTTS