In a recent article for The Wall Street Journal, columnist Jason Zweig laments how wrong he was five years ago when he characterized gold as “a pet rock,” but still makes a case for investor caution.

“Oh, was I ever wrong,” he writes. “The yellow metal didn’t sit inert. Since I wrote that column five years ago, gold has returned an average of 10.5% annually—barely below the gains on U.S. stocks.”

“Even so,” Zweig argues, “traders and investors who are perennial fans of the yellow metal have a flaw in their thinking, too. They always believe gold is cheap, no matter what, even though they seldom have the same reasons for believing that it’s cheap. That is its own sort of mistake.”

Zweig notes that gold is attracting a lot of interest lately, in part as a “buffer against high inflation, protection against a falling dollar or a universal currency that shines brightest when the news is darkest.” But according to Standard Chartered Bank’s head of precious metals research Suki Cooper: “The factors that drive gold prices tend to fluctuate,” she argues, adding, “It’s is a fickle kind of asset.”

Zweig cites the example of 2008-09, when investors rushed to gold in the wake of the financial crisis hoping that the trillions in government spending would lead to a surge in its value. Although the price did rise (up to $1,900 by the summer of 2011), Zweig writes, “the hyperinflation never materialized.” In fact, Zweig argues, gold is “a poor hedge against inflation. Accounting for changes in the cost of living, gold has returned an average of minus 0.4% annually since 1980,” versus positive annual returns for stock, bonds and cash.

Still, current paltry interest rates have “fueled high returns for gold,” according to Zweig, “So, the yellow metal, once considered a hedge against an overheated economy, has become a bet against a return to economic growth.” But Cooper says it’s not a given: “The main downside risk to gold is that interest rates may not remain low for a prolonged period.”

Zweig concludes, “there’s nothing wrong with keeping a few percentage points of your portfolio in gold,” if you build the position gradually and hold it as insurance against a collapse in the dollar. However, he says, “if you’re buying gold by the fistful now that it’s surged in price and popularity, then you run a substantial risk of ending up being as wrong as I have been.”