Gold: Historical Trends Shatter Inflation, Market Crash Hedge Narratives

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Commodities Analysis by Avi Gilburt covering: XAU/USD, XAG/USD, S&P 500, US Dollar Index Futures. Read Avi Gilburt's latest article on Investing.com

is a hedge against inflation or a hedge against market weakness again, I think my head is going to explode. Oops. Too late. I just saw an article claiming that “earish signs in the stock market indicate it's a good time to hedge portfolios with gold and

I do not have to go back terribly far in history to prove this premise as being an outright falsehood. First, let’s start with early 2020. As theproceeded to crash during the Covid outbreak, did gold rally? Nope. Did gold at least remain stagnant? Nope. In fact, gold proceeded to drop by 15% during that time. Silver was even worse as it lost almost 40% of its value during that same timeframe.

What is most interesting is that most of these same folks also maintain a worldview that gold will not rally alongside the equity market. I just read another article that outlined this erroneous commonly held view, and claimed surprise when it does rally alongside the equity market: They even quote a supposed gold “expert” in this article, who claimed,"it is absolutely counterintuitive of everything I've ever seen in a rally." If this is what he has seen in the gold market history, then he is clearly looking at the market with blinders or simply not looking at the market at all.

And, the same applies to inflation. How many of you were absolutely shocked that gold did not rally in 2021, 2022, and 2023 while inflation was raging forward through the economy? If you maintain the premise that gold is a hedge against inflation then you would have been.

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