Gold

The US Dollar has lost an average 3.2% of its purchasing power per year over the last century…

Fiat currencies such as the USD are depreciating credit notes. Over time, these credit notes become worthless in a process that we call inflation. The United States dollar, for example, lost at least 96% of its purchasing power (based on US Treasury data) since the Federal Reserve was created in 1913 with, ironically, the partial mandate to protect the USD's purchasing power.

Another way to look at it is that on average, every year since 1913, the real value of the US dollar diminished by 3.2%, requiring you to earn at least 3.2% more dollars — e.g. in interest — per year merely to maintain your purchasing power. Thus, holding currency is a terrible long-term asset, due to the massive debt burdens and currency printing that the fiat system enables.

…whereas gold has appreciated on average 4% per year over the last century

While currencies are certain to depreciate, requiring interest payments to prevent a loss in real terms, gold has risen on average by 4% per year in USD terms since 1913 — from 20.68 USD to 2,625 USD per troy oz today. Unlike depreciating currencies, gold does not need to pay a dividend because its value reliably appreciates in the long term. This makes gold a proven long-term wealth refuge with excellent liquidity.

Gold is a wealth insurance which provides, in real terms, a positive 0.8% p.a. (4.00% average gold appreciation in USD terms minus the 3.2% USD official depreciation) average return since 1913. Read How Currencies Depreciate and Gold Appreciates over Time on this topic.

Furthermore gold's returns can be quite reliably increased multifold, by switching gold holdings to silver when the silver gold ratio is above 80 and switching back to gold when the ratio is below 50. Such switching between silver and gold relies on the fact that the relative price of these two metals bounces back and forth over time, making one temporarily cheaper vs. the other for a short period. Today this ratio is 0. Read more on how this ratio is a great indication on whether to buy silver or gold.