Turner Investments has spent the past several years fielding one question more than any other: how do you protect a retirement account when the dollar keeps buying less?
Annual inflation sat at 3.4% as of the August 2026 Consumer Price Index report from the Bureau of Labor Statistics, still above the Federal Reserve’s 2% target.
Gold has answered that question for investors since the United States left the gold standard in 1971, and the current market cycle gives that history fresh relevance.
Key Points
- Gold rose from $35 an ounce in 1971 to $850 in January 1980, a period when U.S. inflation peaked near 14.8%.
- Central banks bought a record 1,136 tonnes of gold in 2024, and global gold ETFs pulled in $89 billion in 2025, both signals of sustained institutional demand.
Why Cash Loses Ground and Gold Tends to Hold It
Cash loses purchasing power every year that prices rise faster than the interest paid on it. A dollar earning 4% in a savings account while inflation runs at 3.4% nets only about 0.6% in real terms, and that gap widens the moment a bank trims its rate.
Gold carries no yield of its own, but it also carries no promise from a government or a central bank. That distinction mattered during the 1970s.
Gold gained over 2,300% between 1971 and January 1980 as U.S. inflation reached its highest levels of the postwar era, according to data compiled by the Bureau of Labor Statistics and multiple gold market historians.
The relationship is not automatic, though. Research from BNY found a correlation of only 0.341 between gold prices and inflation from 1967 to 1980, and that relationship weakens further after 1980.
Gold tracks real interest rates (the yield on Treasury bonds after subtracting inflation) more reliably than it tracks the headline inflation number. When real rates fall toward zero or below, gold usually gains. When real rates run high and positive, as they did through much of the 1990s, gold tends to stagnate.
That nuance should guide the decision on when and how much gold to hold, not the CPI print alone.
How Much Gold Belongs in a Retirement Portfolio
Most research firms that recommend gold suggest an allocation between 5% and 15% of a portfolio, sized to the investor’s age, risk tolerance, and existing exposure to real assets. Turner Investments does not manage client funds directly, but the framework below reflects how that sizing typically breaks down.
| Investor Profile | Typical Gold Allocation | Rationale |
|---|---|---|
| Conservative, near retirement | 10-15% | Capital preservation outweighs growth |
| Balanced, mid career | 5-10% | Diversification against equity and bond correlation |
| Growth focused, younger investor | 3-5% | Smaller hedge, larger allocation to growth assets |
A position above 20% starts to work against diversification, since the portfolio then depends heavily on one commodity’s price cycle. A position under 3% is often too small to meaningfully offset a downturn in equities or bonds.
Physical Gold Versus Paper Gold
Physical gold and paper gold protect against different risks, and conflating them is one of the more common mistakes investors make. Physical ownership means coins or bars held in a depository or, less commonly, at home.
Recognized products include the American Gold Eagle, the Canadian Gold Maple Leaf, the South African Krugerrand, and PAMP Suisse bars, all of which trade with tight bid ask spreads because dealers know exactly what they are buying back.
Paper gold includes ETFs, mining stocks, and futures contracts. These instruments track the gold price and trade instantly, but they carry counterparty risk. In a genuine currency crisis, that is the risk physical gold is meant to avoid.
- Physical gold held in a self directed IRA must meet a minimum fineness of 0.995 and sit in an IRS approved depository, not a home safe.
- ETFs offer same day liquidity and lower storage cost, useful for a shorter term trade rather than a long term hedge.
- Mining stocks add operational and equity market risk on top of the gold price itself, so they behave less like a hedge and more like a leveraged bet.
What Is Driving the Current Cycle
Central bank buying explains more of this rally than retail demand does. Central banks purchased a record 1,136 tonnes of gold in 2024, led by China, Poland, and India, according to World Gold Council data.
China’s net gold imports rose to 317 tonnes in the first quarter of 2026 alone, nearly three times the pace of the prior quarter, according to J.P. Morgan Global Research. Global gold ETFs added $89 billion in 2025, the strongest year of inflows on record, pushing total ETF holdings to 4,025 tonnes.
Gold hit its all time high of $5,589 an ounce on January 28, 2026, then corrected roughly 14% into the low $4,000s by mid year before recovering above $4,400. J.P. Morgan projects an average price near $6,000 an ounce by the fourth quarter of 2026.
None of that is a guarantee.
Gold dropped roughly 19% on average in the months following the Fed’s first rate hike during each of the four stagflation cycles of the 1970s, then recovered within about four months in nearly every case. Volatility comes with this asset class. Investors who sell during a correction tend to miss the recovery that follows it.
Mistakes That Undermine a Gold Hedge
Buying gold at the peak of a headline driven rally, with no plan for how long to hold it, causes more damage than not owning gold at all.
- Treating gold as a short term trade instead of a multi year hedge against currency and rate risk.
- Storing IRA eligible gold at home, which violates IRS rules and can trigger taxes and penalties on the entire account.
- Concentrating the hedge in mining stocks alone, which move with the broader stock market as much as they move with gold.
- Ignoring premiums over spot price. They vary widely between coins, bars, and dealers, and can erase years of price appreciation if paid carelessly.
“My philosophy is straightforward: focus on real assets,” said Charles Turner, founder of Turner Investments, on the firm’s About Us page. Commodities, real estate, and other tangible holdings have anchored his approach to research for three decades.
Conclusion
Gold has protected purchasing power through every major inflationary period since 1971, but the size and structure of the position determine whether it helps a portfolio or adds noise to it.
Investors who treat gold as a long term hedge rather than a short term trade, and who understand the difference between physical and paper exposure, are better positioned to benefit from it.