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An eagerly awaited inflation report released Wednesday may not have revealed the result investors were hoping for.
Inflation in February remained identical to what it was in January, with the rate staying put at 2.4%. While that’s still an improvement from last year, the progress toward lowering it further appears to be on pause. And with geopolitical tensions having the potential to cause it to rise further (this report outlined data before recent overseas conflicts), it will provide little useful insight that investors can rely on right now.
For investors considering gold, which has long been considered a reliable hedge against inflation, it may not be clear if the metal is worth pursuing right now. After all, if inflation is steady, although not ideal, is gold investing really worth it? Or should investors evaluate alternative assets instead? Below, we’ll break down three things investors should consider about gold following today’s new inflation developments.
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Does gold investing make sense if inflation is steady? 3 things to consider now
While a gold investment may not be advantageous for every investor today, it’s not worth dismissing in totality, either. Here’s why it could make sense even with the fight against inflation stalled:
Inflation is stuck (not declining)
With the inflation rate now the same in two consecutive reports and it being around a half a percentage point above the Federal Reserve’s target 2% goal, it’s important to note that inflation is actually stuck now. Far from declining, it could even rise this March should geopolitical tensions have an inflationary impact, as many economists are expecting.
Against this backdrop, it makes sense to add gold to your portfolio to hedge against still sticky inflation and slumping stock market returns. Just be careful not to overinvest and overcompensate, either, as the recommendation of limiting gold to 10% of your overall portfolio still stands, even with progress against inflation stagnating now.
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Inflation is cyclical
Inflation is far from the 9% range it sat near in June 2022, but it’s still not precisely where many would like it to be at this point in 2026. And even if it eventually gets there this year, it’s important to remember that inflation is cyclical. It can and will rise again in the future, perhaps at a time when least expected.
So it makes sense to protect your portfolio preemptively against this economic reality. Plus, with the price consistently rising here in recent years, it can be helpful to get started promptly – or risk being priced out of the market entirely.
Gold can do more than protect against inflation
While perhaps best known specifically as a hedge against inflation, gold is an asset with multiple advantages for investors. It can also serve as a smart portfolio diversification tool to offset market uncertainty, even when inflation is under control. And, right now, it could even be a quick income producer, if investors buy low and sell high.
While traditionally known as an income protector, today’s rapidly growing price offers a rare opportunity for investors looking to turn a quick profit. And with physical gold bullion being liquid and more places than ever to buy it from, now should be a relatively simple time to get started with the yellow metal.
The bottom line
A gold investment does still make sense this March, especially considering the limited recent progress made toward reducing the inflation rate. With inflation stuck, likely to return at an unknown point in the future, and the reality that gold can do a lot more than simply protect against the impact of inflation in today’s price landscape, it can make sense to get invested now. Speak with a gold investing company representative today who can answer your questions and help you get started with the right type in the right amount.