Gold has a well-burnished reputation as an inflation hedge, and gold aficionados often point to gold’s ability to hold its value over time. In a well-worn piece of investment folklore, it is often said that one ounce of gold should roughly translate into the price of a high-quality men’s suit, for example.
Gold’s popularity as an inflation hedge is one of the reasons behind its recent surge. (Others include massive levels of buying by central banks looking to diversify their reserves beyond the U.S. dollar, as well as investors seeking a safe haven amid heightened geopolitical and macroeconomic uncertainty.)
But are investors making the right move by heading into gold as an inflation hedge? Here, I’ll look at how gold has historically fared during periods of higher inflation, as opposed to commodities. Spoiler alert: Gold has a mixed record as an inflation hedge, but commodities are more reliable.
Commodities are typically defined as raw materials or bas
