This should be gold’s time to SHINE…
In a time of high global inflation caused in part by massive money printing and fiscal stimulus experiments, gold should be rocking.
But instead, gold hit a 2 year low this week.
For decades investors have linked gold and inflation together.
The Theory: As inflation rises, the purchasing power (or the quantity of goods) that $1 Dollar can buy, will go down.
Which in layman’s terms means the dollar bill in your pocket today will buy less stuff tomorrow, than it will today.
Gold and other real assets like art and real estate tend to hold their value much better and retain their purchasing power.
This means they should be a better asset class to invest in during inflationary periods.
The Test: Gold and Inflation
Below is a table that shows the performance of gold, dollars, oil, and equities during periods of US tightening cycles over the last 60 years.