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Gold hedges inflation in 2022 YTD

by Chirag Sharma
Gold hedges inflation in 2022 YTD

Given historically high inflation, why haven’t we seen a big rally in gold and silver?

There are a number of factors that have weighed on precious metals, but as the World Gold Council points out, it’s important to put gold and silver’s recent price movements in a broader perspective.

In fact, gold has been one of the better-performing asset classes in 2022.

Gold has outperformed US bonds, foreign bonds, the S&P 500, foreign stocks, the NASDAQ, and US Treasury Inflation-Protected Securities (TIPS).

The only things that have outperformed gold are commodities, especially oil and agricultural goods, and the US dollar.

So, while gold has fallen more than 5% over the year, it has fallen far less than most other assets, and if you hold gold in your portfolio, it has helped hedge some of those other losses.

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