Spikeflation Fears Push Investors Into Gold and Commodities

As of June 4, investors are adapting to a new regime of intermittent energy-driven inflation spikes by adding broad commodity baskets and gold hedges while de-emphasizing long-duration bonds. The shift follows April’s 3.8% headline PCE and 3.3% core PCE prints that lifted the 2-year Treasury yield near 4% and prompted the University of Michigan’s 4.8% year-ahead inflation expectation on May 31. Persistent cost pressures, a savings rate at 2.6%, and record-low consumer sentiment have led advisors to tilt retiree portfolios toward XAUUSD, TIPS, dividend equities and REITs, with historical data showing commodities outperforming in spikeflation periods.