Bank of New York: Gold’s “Halo” Expected to Fade, U.S. Stocks Are a Better Inflation Hedge!

Sinead Colton Grant, Chief Investment Officer of Bank of New York Mellon’s Wealth Management division, recently stated that after repeatedly hitting record highs, gold prices have “plunged” and stagnated, signaling that U.S. stocks are a superior tool for hedging against volatility.

She noted that commodities like silver and gold have performed “very well” as inflation hedges, but added, “Over the long term, stocks are a better inflation hedge.”

Gold Price “Has Peaked”  

Grant explained that Bank of New York Mellon did not make strategic investments during gold’s rally due to its excessive volatility.

She said the months-long surge in gold prices was partly driven by a declining U.S. dollar index, but added, “That trend may now be over.” She cited the dollar’s performance this month: the dollar index fell ~11% from the start of the year through September but has risen ~2.4% since mid-September pubs.

Meanwhile, she noted that concerns over U.S. Treasury devaluation were “overblown,” which also drove investors into gold. Grant said Tuesday’s gold plunge—after days of dollar strength and the 10-year U.S. Treasury yield falling below 4%—was “very telling.”

She also said that while tariff concerns could raise prices, Bank of New York Mellon is not worried about a sharp near-term inflation spike, as they expect President Trump’s “big and beautiful” tax bill to boost the economy.

Bullish on U.S. Stocks  

Grant said the bank recommends increasing exposure to U.S. stocks, as its analysts expect U.S. equities to “stand out” in performance.

Specifically, she explained that the strength of the U.S. tech sector and the country’s productivity growth “is more than double that of most other developed nations.”

“We expect U.S. economic growth of 1.8% this year and 2% next year,” she said.