Gold is viewed by many as one of the main hedges against inflation. With the Consumer Price Index up 9.1% year-over-year in June and gold prices down -6% year-to-date, gold has not offered much of a refuge.
Our research shows how the price of gold correlates much more with "real interest rates" than with inflation. When interest rates drop and inflation increases gold tends to do well. Conversely, when interest rates rise and inflation drops gold tends to underperform.