Inflation fears are once again swirling on Wall Street after the Consumer Price Index (CPI) jumped 2.9% year-over-year in December. The 10-year Treasury yield (ZNH25) is flirting with 5%, and President-elect Donald Trump is about to take office for his second term in the White House. Investors looking to make sense of this noise may find an answer in a sparkling spot, gold (GCG25).
As Barron’s recently wrote, gold has a complex relationship with inflation. Investors flock to it as a hedge, but when bond yields are up, they will pursue bonds instead.
