Despite the dazzling run of the yellow metal to more than $1,000 a troy ounce, the returns for the investors have not been all that great.

Put it simply, if one discounts the impact of inflation that has pushed prices of all commodities up, the net rise in return has been just 38%, even on a 20-year scale.

This is interesting in the context of the massive bull run in the price of gold that, going by pundits, could soon test $1,200 levels.

Last week, for instance, as the US dollar dropped to a 14-month low against the euro, gold prices soared.

But as FE tracked the price of gold and its inflation-adjusted price for a 30-year period since 1980, it seems there is still a long way to go before investors actually start making profit.

This means the returns for an investor who bought a troy ounce gold then has actually been sub-par compared to other asset classes like equities.

In the last ten years, investment in 10 grams of gold bar in India would have given a return of around 197%, while around the same time; one rupee invested in the BSE sensitive index would have given a return of around 345% by 2008-09.

Data shows that during the 1980s actual gold price and inflation-adjusted gold price started showing strong divergence.

This was also the time when in India–the world?s largest consumer of the yellow metal and has a big say in determining prices?inflation started firming up.

RBI data shows that during the 1980s, average wholesale price index-based inflation rose from 100 in 1981-82 to 165.7 in 1989-90.

In 1981, gold?s average inflation adjusted price was around $512.14, while the actual annual average gold price was around $459.26 per troy ounce.

The scenario started changing dramatically since the 1990s; gold?s actual price rose from around $383.32 per troy ounce in 1990 to around $871.65 per troy ounce in 2008. But at the same time, inflation-adjusted price of gold went up from $294.77 per troy ounce to just $405.6 per ounce.

In other words, though actual gold prices were rising steadily, when adjusted to the prevailing high inflation rate, its rise was far less spectacular.

India?s average WPI during the time rose from 165.7 to 247.8 in 1993-04. In the last five years, when gold actually started moving up as much faster clip, the actual gold price far exceeded the inflation-adjusted price.

In 2005, according to the World Gold Council, gold?s actual price averaged $444.47 per ounce, while the inflation-adjusted price that year was around $228.7.

Similarly, in 2008, when gold prices for the first time crossed the long psychological level of $800 per ounce; the actual average gold price of the year was around $871.65 per ounce, the inflation-adjusted price averaged around $405.6 per ounce.

This year, gold prices have broken all records and proved far more lucrative an asset class than equities and others, and steadily climbed over $1,000 per troy ounce largely on account of uncertainty over economic recovery, slight improvement in oil prices and continued dollar weakness. In inflation-adjusted terms, gold prices were around $432.9 per troy ounce. Though the current gold prices might seem alluring to many, when adjusted with the prevailing high rate of inflation, it seems to be just a bubble.