Justin Wolfers Talks Gold And Oil, Says Only One Is An 'Essential Commodity' While The Other Runs On 'Self-Sustaining Equilibrium'
Sweta Killa 7 months ago
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Economist Justin Wolfers highlighted a core idea in commodities that capture the forces driving today's ETF flows. Gold, often seen as a "self-sustaining equilibrium," continues to attract investors through funds like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU). Oil's indispensable role in the global economy underpins demand for ETFs such as United States Oil Fund (USO) and United States Brent Oil Fund (BNO), as investors tap into its fundamental importance across industries.
Economist Justin Wolfers, on Tuesday, highlighted a core idea in commodities that captures the forces driving today's ETF flows: gold as a belief-driven asset and oil as a core pillar of the global economy.
Gold: A Belief-Driven Asset
In a social media X, Justin Wolfers said "Gold has no inherent value. It’s a shiny rock… people buy gold because they think other people value gold, and that’s a self-sustaining equilibrium."
"Gold has no inherent value. It's a shiny rock… people buy gold because they think other people value gold, and that's a self sustaining equilibrium." pic.twitter.com/idu2WxOj3k
— Justin Wolfers (@JustinWolfers) April 13, 2026
Though gold does not generate income or produce anything, Wolfers argue that its value largely comes from perception and a collective trust. People buy gold because they believe others will continue to see it as valuable in the future. This shared belief creates a cycle—since everyone expects others to value gold, demand stays strong, which in turn keeps prices high.
ETFs such as such as SPDR Gold Shares (NYSE:GLD) or iShares Gold Trust (NYSE:IAU) are one of the main vehicles through which that belief is expressed today. Both funds offer exposure to gold without physically owning it. Both the funds have gained double-digits since the start of the year.
Benzinga Edge Stock Rankings indicate that GLD and IAU maintain strong trends in the medium and long terms, with a strong Momentum score in the 76th percentile.
GLD
IAU
Oil: A Pillar Of Global Economy
Wolfers described oil as “an absolutely essential commodity that’s built into our economy in all sorts of ways that are not immediately obvious.”
"Oil is an absolutely essential commodity that's built into our economy in all sorts of ways that are not immediately obvious."
— Justin Wolfers (@JustinWolfers) April 13, 2026
pic.twitter.com/cLvjjzdJDU
According to Wolfers, oil is deeply embedded in everyday life far beyond just fuel for cars Even when we don't see it, it plays a critical role in keeping economic activity running smoothly. Oil's value is rooted in real-world consumption from transportation and manufacturing to petrochemicals and energy production.
ETFs such as United States Oil Fund (NYSE:USO) and United States Brent Oil Fund (NYSE:BNO) allow investors to tap into this foundational role. USO follows WTI futures prices and was up 80.5% this year. BNO, which tracks Brent futures, gained about 67% year-to-date.
Benzinga Edge Stock Rankings indicate that USO and BNO have a Momentum score in the 95th percentile and 93rd percentile. They maintain strong trends in the short, medium and long terms.
USO
BNO
| ETFs | YTD Price Performance |
| GLD | 10.3% |
| IAU | 10.3% |
| USO | 80.5% |
| BNO | 66.8% |
Photo: FXQuadro / Shutterstock