Inflation hedge? Hedge against economy tanking? Any of that stuff? Apparently not, at least not anymore!!! *smashes head against wall*
Gold was a hedge against inflation but even more so uncertainty in the 70's/80's. Now just living off of past glory and bunker buying tinfoilhat folks.
All that matters in this era of industrial-scale, largely passive asset allocation is liquidity. Rising liquidity means portfolio balance effects lift all assets higher, falling liquidity (as is the case now) does just the opposite. Gold is also sensitive to real rates. Rising real rates are major headwind since it makes income-yielding alternative investments more attractive. I'd actually say that gold has held up extremely well, far better than expected.
%% IT's still going up long term, as of JAN 2008. Has it ever been a real good inflation hedge ?? All most never as good as SPY benchmark; plus storage + insurance
Depends on where you start from. This is $SPX/Spot Gold ratio chart. Held up good from Jan 4th, 2022 high, not so good from March 23, 2020 low:-
Monetary deflation is happening, not inflation. The rising prices we all see are the result of a lack of production. Gold will protect you from monetary inflations. Nothing can protect you if people don't want to produce the things you need. For this reason I think the fed will start backing off their harsh, "rates are going up no matter what" language sooner than most expect. Risk assets will adjust upward accordingly. And yes, gold will go up too when the fed essentially gives up and allows prices to keep rising.
The dollar is just getting weak slower than other currencies. Nothing strong at all about the purchasing power of my dollar when I go shopping. People want it less and less.
I keep reading that here, yet there is no evidence (FedSpeak, bond markets moving cautiously, etc) to support it. Just the opposite. This is what we have so far 03/17/22 25 basis points 05/05/22 50 06/16/22 75 07/27/22 75 09/21/22 75