As gold tanks, don't expect central banks to come to the rescue


As gold slides on the back of a strong jobs report, some investors may be tempted to pile into the precious metal. After all, a cacophony of pundits are convinced that gold can only head higher since the world's central banks will pile into the precious metal. And a drop like the near 4% slide on Friday is a chance to get in before the inevitable move upwards resumes.

Everyone agreeing that an asset can only go up in value -- take tech stocks at the end of the last decade, or real estate prices more recently -- should be a warning sign in itself to potential investors. But the latest argument for buying gold advanced by some of its staunchest proponents -- that prices will skyrocket as central banks load up -- is strikingly shoddy and investors would be wise to steer clear of the famously volatile metal.