Commentary
Gold, traditionally an inflation hedge and a haven investment during times of market duress, has not been an effective investment this year.
Inflation has been elevated. The Consumer Price Index was up 8.5 percent in July versus a year ago, slightly lower than the 9.1 percent year-over-year reading in June. And despite a recent U.S. stock market rally, the S&P 500 Index remains down 10 percent year to date. And gold’s theoretical nemesis, bitcoin—which some experts dub as “digital gold”—is down almost 50 percent on the year.
All of this suggests a perfect backdrop for gold to outperform, right? Wrong.
While gold hasn’t been the worst performing asset class, it has nonetheless languished. The price of gold has fallen by more than 3 percent since Jan. 1. The NYSE Arca Gold Miners Index is also down more than 16 percent on the year.
There are a few reasons for this, despite the seemingly ripe conditions.
First,…
