Gold has had a poor run since its peak of $1,950 U.S. an ounce in 2011; its current price of $1,174 an ounce is now 40% lower. Over the same period, stock markets have soared. This has led many investors to question the role of gold in their investment portfolios. Gold has historically offset U.S. dollar weakness Gold is priced in dollars, and has historically appreciated in a falling U.S. dollar environment. It could therefore be argued that it forms a natural hedge during times of U.S. dollar weakness. However, the U.S. dollar has gained against the major currencies since 2014; initially supported by rising interest rates and lately by a perception that protectionist trade policies will benefit the U.S. economy. That has hurt gold. Gold has provided inflation protection Historically, investors have used gold as an inflation hedge, with the result that its price has increased substantially when inflation rises above 3%. Inflation has been slowly but surely increasing over the past few years and…