Nicole Lapin

Gold rises when uncertainty is high and when confidence in institutions is low.

It is called the flight to safety asset.

Right now, we have a war in the Middle East.

We have persistent inflation, a federal reserve that cannot stop fighting within itself.

Global central banks buying up gold at a significant pace.

JP Morgan forecasting gold pushing toward $5,000 an ounce by Q4.

All of these things create a very favorable environment for gold right now.

But gold does not always rise in lockstep with inflation.

Gold is not an eye bond, which is designed to do that.

During the inflation surge during the pandemic, a lot of people bought gold, expecting it to immediately skyrocket as CPI climbed.

But it didn't, at least not right away.

That's because of this exact flight to safety idea.

Gold tends to rise when the real return on safe alternatives like bonds is low or negative.

So when the Fed was aggressively hiking rates in 2022 and yields went up, gold actually traded sideways despite inflation.

In 2026, with the Fed on hold and real rates under pressure, gold is much better positioned.

Gold really thrives when the economy is basically a dumpster fire.

When everything is going wrong all at once, currency debasement, institutional collapse, geopolitical shock, in this environment, gold really shines.

No pun intended.

Maybe a little.

So I'd say gold is less an inflation protection move and more of a wealth preservation move.