>>We were talking about the USD/Gold performance not compunding...

>>We were talking about the USD/Gold performance not compunding interest... we were talking about the likely direction of gold in USD .. or the USD vs gold i.e what the chart is likely to look like in the future.
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The example you gave didn't say that. You asked the value of investment in gold vs cash - the analysis shows that using cash to invest otherwise gives better returns over the long term (relatively recent history like the last 108 years).

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>>Some here think the USD will strengthen.
>>It may temporarily but what has history shown over time?
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History has shown the resilience of the US dollar over time. It goes up and down against other currencies but has strong domestic backing as well as being the currency of choice for international trade.

>>By the way ..You can have gold compounding too in a sense by investing in a gold miner .. it doesnt have to be locked away.
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Exactly - depending on the timing, investing in equities is probably a better bet, especially today with the price of gold high and the price of equities low. Make sure you pick a sound company to invest in.

>>but even locked away and doing nothing, it still is more "money" than fiat money.
Some people dont see gold as real money and my previous crude illustration should resoundingly show it is.
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As others have intimated, gold is no more real money than real estate, shares, bonds, art, collectibles or any other tradeable item. You can exchange it for money or for anything else that the other party is willing to barter.

I think you're starting to get the drift - invest in gold when the price is low if that's what appeals to you and sell when the price is high - as with gold shares, other shares, real estate or anything you feel like. Bearing in mind that some investments are more liquid than others if you ever need quick cash (ie money).