Image: Wikimedia Commons.

For more than a decade at the start of the new millennium, gold's performance overshadowed the positive returns from stocks, with the yellow metal's price climbing more than 600% from its low in 2000 to above $1,900 per ounce in late 2011. Yet over the past three years, stocks have reasserted their dominance, with the S&P 500 (SNPINDEX:^GSPC) collecting strong double-digit percentage gains in each of the past three years even as gold prices plunged. After being immensely popular, gold has almost entirely dropped off the radar screen for most investors. Let's look at why gold is no longer in the spotlight and what it means for those who invest in precious metals.

Gold: tarnished on two fronts
Historically, gold has tended to thrive during troubled times, and so it isn't terribly surprising that the market for this commodity did so well during the 2000s. With two major bear markets in stocks, gold was a natural place for worried investors to turn, particularly given that the precious metal hit its lowest levels since the 1970s before beginning its bull-market run. Low interest rates also made it easier for investors to buy gold, as cheap financing minimized the opportunity cost of investing in the yellow metal rather than income-producing assets.

By 2013, though, many of the factors supporting gold were eroding. The threat of rising rates played a role in sending gold prices sharply lower two years ago, as gold-mining companies were suddenly faced with higher debt-maintenance costs after making major investments in new projects. Regulatory hurdles proved difficult for major gold companies such as Barrick Gold (NYSE:GOLD) and Newmont Mining (NYSE:NEM) to overcome, calling the future of major projects into question. The recovering U.S. economy also hurt interest in gold, as many had seen the precious metal as a hedge against a slide back into recessionary conditions after the financial crisis.

After its big plunge, gold's other problem has been that prices simply haven't moved much. Traders thrive on volatility, and the big swings in precious metals provided plenty of profit opportunities for active participants. In the past couple years, though, gold prices have remained stuck between $1,150 and $1,300 per ounce, and that hasn't left as many tradable events for commodity traders to focus on. Interest in gold investment vehicles such as SPDR Gold Trust (NYSEMKT:GLD) and Market Vectors Gold Miners ETF (NYSEMKT:GDX) has also waned dramatically.

More attractive alternatives have displaced gold from its perch atop the commodity sector. Crude oil and other energy products have experienced nearly unprecedented volatility over the past year, and that has led more commodity-market participants to focus on energy. With oil now responding to global economic and geopolitical conditions, gold has lost its former leadership position among commodities.

Gold might eventually regain its luster, but for now its reputation as a key commodity has clearly been overshadowed by oil and the stock market. That means gold's next move will take many people by surprise, but it might not come for a long time.