Vembu’s remarks coincide with a strong increase in gold prices. Prices surpassed $4,000 per ounce this week and then increased further with the imposition of 100% tariffs on Chinese imports by US President Donald Trump.
Citing macro analyst Lyn Alden’s in-depth analysis of the past performance of key asset classes, Zoho founder Sridhar Vembu has once again argued for gold as a dependable long-term store of wealth, a position he has maintained for more than 20 years.
In a post, Vembu said, “I have been in the ‘gold as insurance against currency debasement’ camp, for over 25 years now.” In the long run, gold has maintained its buying power in relation to commodities such as petroleum and has been able to compete with wide stock market indices. No, I have no interest in cryptocurrency.
Vembu’s remarks coincide with a strong increase in gold prices. This week, prices surpassed $4,000 per ounce, and they continued to rise when U.S. President Donald Trump put further limitations on U.S. software exports and placed 100% tariffs on Chinese imports. Investors flocked to conventional safe-haven commodities like gold and silver as a result of the actions, which sent world markets plunging.
Vembu reaffirmed his conviction that gold is still one of the few assets that can reliably maintain buying power over time, citing Alden’s findings. According to Alden’s thorough research, most assets, including government bonds, stocks, and real estate, have historically outperformed gold when adjusted for inflation and currency devaluation, even in the face of the U.S. dollar’s supremacy and the emergence of contemporary financial markets.
Alden’s study found that U.S. Treasury bonds eventually fell short of gold’s purchase value, even as the dollar became the global reserve currency.
Even while stocks as an asset class seem to perform better, the great majority of stocks only marginally outperform short-term government bills, with just 4% of all stocks accounting for virtually all excess market gains.
On an unlevered basis, real estate has underperformed gold after accounting for inflation, maintenance costs, and property taxes, despite being generally considered a reliable long-term investment.
“Almost all government bonds and the majority of unlevered real estate have underperformed gold over the long term,” says Alden. Only because a small number of outstanding corporations own the whole index do stocks outperform.
This supports Vembu’s long-held belief that gold works best as a hedge against the depreciation of fiat money rather than as a speculative asset. His increased focus on gold emphasizes its timeless function as financial protection in a world of changing monetary dynamics amid a time of economic turbulence, increasing tariffs, and policy uncertainty.