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Gold has a reputation as being an effective hedge against inflation. Is this reputation deserved? The author compares the performance of gold to that of commodities during several inflationary periods.
Per Morningstar, its Commodities > Gold for your inflation hedge allocation. I still like Gold as a geopolitical hedge, though. It has performed well recently.
Many had wishful thinking of 5-6 rate cuts this year. FED announced to hold rate flat until September’s meeting as inflation lingers. My bet is there will be no rate cut this year. The tariffs has yet taken full effect on the economy.
Holding more gold would help to hedge inflation. Even better would be holding some gold miners funds.
It took well over a year from the last CoVid stimulus (Jan 2021) for inflation to really rear up. And that was trillions of dollars of stimulus. So, I agree that tariff-induced inflation may take while to become a problem. Which is good, as it will be much harder to blame the previous administration. Of course, they will still try.
As to gold, it has had such a runup already IDK if it has more room to run. It is up around 26% YTD. VCMDX, a commodity index fund, is up around 6% YTD and well below where it was in second half 2022. If I were hedging against inflation, I'd try a broad approach. Just MHO.
Comments
PRPFX and SGENX hold gold allocations.
Holding more gold would help to hedge inflation. Even better would be holding some gold miners funds.
As to gold, it has had such a runup already IDK if it has more room to run. It is up around 26% YTD. VCMDX, a commodity index fund, is up around 6% YTD and well below where it was in second half 2022. If I were hedging against inflation, I'd try a broad approach. Just MHO.