A lot has been said about the merits of gold as an investment. Investors and market commentators fervently debate whether it could or should be used to protect against inflation, to hedge US dollar exposure, or even used as an asset of last resort. While there is abundant opinion about the rationale for holding gold or what measures should be used to assess its effectiveness, its role in a portfolio (eg, inflation protection, currency hedging, safe haven) and the measures used are quite often inadequately defined. We find that gold serves two main purposes: it protects – even improves – purchasing power and it helps manage risk. Here we de ne and discuss the measures that support the case for gold as a foundation for investors’ portfolios.