Gold as an Inflation Hedge… WSJ – Commodity Research Group

August 10, 2021 by Jim Colburn Leave a Comment

Mark Hulbert, Wall Street Journal, has a nice piece on gold, here…

He quotes the excellent Campbell Harvey:

”Gold is only a good inflation hedge over time frames far longer than any of our investment horizons, according to research conducted by Duke University professor Campbell Harvey and Claude Erb, a former commodities portfolio manager at TCW Group. They found that it’s only when measured over very long periods—a century or more—that gold has done a relatively good job maintaining its purchasing power. Over shorter periods its real, or inflation-adjusted, price fluctuates no less than that of any other asset.

Gold’s weakness as an inflation hedge may be even more pronounced today, Prof. Harvey says, because “gold is currently very expensive compared to its history.” The current gold-to-CPI ratio stands at 6.5, for example, nearly double its 50-year average of 3.6.“

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

Reader Interactions

Leave a Reply Cancel reply