If you’re looking to store your wealth in gold, you’re looking in the wrong place.
That’s a hot take given bullion’s blistering rally over the past year, but there’s simply no way to tell if the precious metal is being priced fairly, according to billionaire investor Howard Marks.
In a wide-ranging fireside chat at Pepperdine University, the cofounder of Oaktree Capital Management questioned gold’s reputation as a store of wealth and contrasted the metal to investments like stocks, bonds, and real estate, which generate cash flow and can be priced based on their expected return.
Bullion, like other alternative assets, has no cash flow, meaning there’s “no discussion” about how to price it, Marks said.
In the past, this has come with some risks to investors of hard assets. Marks pointed to how Brent crude reached a peak of around $147 a barrel in 2008, which analysts at the time attributed to factors like oil having a finite supply, most of which is held by nations that have poor relations with the US.
The price of crude plunged to around $40 a barrel as the Great Financial Crisis unfolded, though those things were still true, he noted.
“You can’t say what the right price for a barrel of oil is, or a bar of gold,” Marks said. “How do you turn all those qualitative elements into a fair price? And the answer is: there is no way. And that is true of gold.”
“There’s nothing that makes gold a store of value other than the fact that people treat it as a store of value,” he added.
Marks referenced a memo he sent to his clients in 2010, where he said gold had the makings of a “perfect” and “ideal investment,” but at the same time, that the metal had zero value as an inflation hedge. While gold is tangible and has a finite supply, there’s nothing that makes the metal a better store of wealth than metals like iron, other than the fact that people seem to agree gold will hold its value, he argued.
“It’s self-deception, nothing but the object of mass hysteria like that exhibited in ‘The Emperor’s New Clothes,'” Marks wrote at the time. “Gold has no financial value other than that which people accord it, and thus it should have no role in a serious investment program. Of this I’m certain.”
Marks’s view is at odds with the consensus among many investors over the last year. Analysts say a host of tailwinds have pushed the price of gold higher, including geopolitical tensions, central bank buying, and waning appetite for dollar assets. The precious metal is up 5% in 2026.
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