Gold is often quoted as being a long term inflation beating instrument. However, in reality it is far from that.

Over the past 23 years since 1990, the price of gold has risen 74.8%, from an inflation adjusted price of $730 per troy ounce in January 1990, to July’s 2013s average price of $1276 per troy ounce. A compounded annual growth rate of around 2.57%.

Furthermore, extending this study over 46 years, all the way back to January 1967, when gold was trading at a inflation adjusted price of $243 per ounce, gold has only risen at a compounded annual rate of 3.75%.

These figures exclude management/interest/storage costs, which usually run at 1% per year.

Meanwhile, a cash deposit at the Bank of England earning the base rate would have grown at a compounded annual rate of 8.57%, over the same 46 year period; a total compounded return of 3332%.