Gold and Inflation: Dave Ramsey Doubles Down on Bad Advice

The fourth quarter is starting with a bang for precious metals markets. Silver in particular posted a big breakout move – surging to a four-month high above $21/oz.

Bulls see the potential for a big metals rally to finish out the year.

However, 2022 has so far seen gold and silver markets struggle to gain sustained traction.

Longtime precious metals naysayers such as personal finance guru Dave Ramsey are pointing to gold and silver weakness throughout most of the year as evidence that they don't protect against inflation. Are the anti-gold bugs right?

It is true that gold and silver prices retreated as the Federal Reserve launched into its most aggressive rate hiking campaign in decades – propelling the Federal Reserve note “dollar” to surge on foreign exchange markets.

It's also true that 2022 has been a historically bad year for most asset classes. It's been disastrous in particular for a diversified stock and bond portfolio of the sort Dave Ramsey and other financial advisors conventionally recommend.

According to CNBC, “From the start of 2022 through September 28, a 60/40 portfolio invested in line with benchmark U.S. stock and bond indexes shed 20%. Only two calendar years — both during the Great Depression — have been worse.”

Gold, meanwhile, has held up relatively well. It has fallen around 6% in U.S. dollar terms this year while rising against virtually all of the world’s other major currencies.