Gold Investment Quick Reference

Section 8: Gold vs Inflation — The Real Data

Gold's reputation as an "inflation hedge" is partially earned and partially myth. Here's what the data actually shows — and what it means for how you position it in your portfolio.

Period	Inflation (CPI)	Gold Return	Real Return	Verdict
1970s	+86% cumulative	+2,300%	+1,214%	✅ Exceptional hedge
1980–1999	+96%	−28%	−64%	❌ Failed completely
2000–2011	+31%	+600%	+458%	✅ Outstanding
2012–2018	+14%	−6%	−18%	❌ Underperformed
2019–2024	+25%	+85%	+48%	✅ Solid hedge

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The real driver isn't CPI — it's real interest rates. Gold thrives when inflation exceeds bond yields (negative real rates). Gold struggles when bonds yield more than inflation (positive real rates). Track the 10-year TIPS yield. When it goes negative, gold tends to rally.

The Gold-Rate Relationship (Quick Reference)

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Fed cuts rates → real yields fall → gold typically rallies. The opportunity cost of holding gold decreases.

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Fed hikes rates → real yields rise → gold typically struggles. Bonds become more attractive vs non-yielding gold.

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Stagflation → gold's best environment. High inflation AND stagnant growth. Central banks can't hike without wrecking the economy.

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Geopolitical shock → gold spikes regardless of rates. Crisis demand overrides everything for the first 1–4 weeks.

The full guide covers gold ETF comparisons (GLD vs IAU vs GLDM), physical gold storage costs, and a 5-step framework for sizing your gold allocation based on your existing portfolio.

Section 8: Gold vs Inflation — The Real Data

The Gold-Rate Relationship (Quick Reference)

Read the full guide — it's free