Interesting graphic in the Businessline that compares the performances of gold, equities, fixed deposits, and commodities index, adjusted for inflation over the past 20 years, appears to indicate that equities form the best investment alternative.
I have blogged earlier about how, over long enough time-periods (say, above three years), equities trump gold and other forms of investment. However, when faced with external shocks and large market uncertainties, as is the case now, gold becomes a preferred speculative hedge.
Update 1 (17/7/2010)
Excellent graphic in the Economist that highlights how gold prices spikes in response to economic shocks.
The 2010 yearly average of $1,154 is still 29% below the inflation-adjusted price in 1980 of $1,623.