Gold as a hedge against inflation
Historical data on gold performance during periods of high inflation.
At a glanceGold is traditionally considered the best hedge against inflation. Historical data shows a positive correlation between inflation and the gold price — but the relationship is not linear.
1970s: US inflation reached 14.8% in 1980. Gold went from 35 USD/oz (1971) to 850 USD/oz (1980) — a rise of 2,300%. This is the most cited example of gold as an inflation hedge.
2021-2023: Swiss inflation reached 3.5% (a 30-year record). Gold in CHF gained ~15% over the period. Partial but real protection — gold outperformed bonds and listed real estate.
Limitations: When central banks raise rates aggressively (as in 2022), gold suffers short-term as bonds become attractive (opportunity cost). Gold mainly protects against unanticipated inflation.
In Switzerland: The Swiss franc is itself a refuge currency. Gold in CHF underperforms gold in USD during periods of dollar weakness. For a Swiss investor, gold primarily protects against a systemic crisis scenario.
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Inflation vs gold price
Purchasing Power vs. Gold (Inflation)
Gold has multiplied its value in fiat currency by:
8.19x
A 1,000 CHF banknote from 2000 is still nominally worth 1,000 today, but its real purchasing power has plummeted. In contrast, a bullion bar bought back then is now worth 8.19x as much (CHF 114.597).