The Globe and Mail reports in its Friday edition that gold is now a contrarian trade. The Globe's David Berman writes that gold futures have tumbled 9.1 per cent this year, with bullion down $340 an ounce from its high in August, making gold a dud among commodities. Gold stocks, which are generally leveraged bets on the commodity, are suffering even more. The NYSE Arca Gold BUGS index, a collection of stocks that includes Toronto Stock Exchange-listed Barrick, Kinross and Yamana, is down 15 per cent this year. Barrick shares have fallen 36 per cent since September. The bullish case is compelling. First, gold and the stock market have been diverging (stocks up, gold down), giving gold an attractive attribute: It provides diversification if the stock market turns volatile because of, say, stretched valuations or disappointing corporate profit growth. Second, Goldman Sachs noted last month that the lower price of gold is already reflecting considerably higher real interest rates (or returns on government bonds after anticipated inflation). That means that the commodity should be able to withstand rising bond yields, according to Goldman, and will perform well if inflation picks up, which some economists expect.