I have always been deeply skeptical of investments in non-cashflow generating assets (gold, fine art, collectibles), where value is almost entirely driven by perception. However, a crisis like the current one illustrates why these types of assets continue to have a hold on investors. When investors lose faith in financial assets (and the authorities and entities that back up those financial assets), they look for physical and tangible investments to buy that they can hold on to. Real estate used to be the investment of choice, but as my last posting indicates, real estate is behaving more and more like other financial assets. There is always gold, the fall back in every financial crisis in history, but the net actually has to be cast wider. I would not be surprised to see other collectible assets, including Picassos and baseball cards, go up in value.
Having said that, I still believe that these are terrible long term investments on their own. After all, an investor who bought gold in the early 1970s and reveled as the price of gold rose to $ 1000 in the last 1970s would have made about 3% a year for the last 30 years on the investment. The best role that I can see for them is as ancillary investments in a larger portfolio, where you accept that the expected return on the investment will be low but you are willing to invest in it anyway as insurance - against inflation and crises. Do I wish I had gold in my portfolio now? Of course! Am I going to sell everything that I own and buy gold? Of course not!