Commodities have long been sold to investors as a way to hedge inflation and of the raw materials, gold has usually been presented as the best inflation-hedging asset.

But investors need to understand that commodities are not a homogeneous asset class, and rather than a mere reaction to inflation, they need to take various market drivers affecting natural resources into account.

Take gold. The yellow metal lagged behind almost every other commodity during the recent rally since 2020. It is true that the precious metal recently got to around $2,080 per ounce, but in real terms this is below the high of 2011, that would be equivalent today to around $2,300. And if we take the high of the inflationary 1970s, as a benchmark, that would now be almost $2,950. Miners and gold-related ETFs also showed an initial rally that later disappointed.