Alresford Financial

15/07/2026

📊 Why is Gold Underperforming While Global Inflation Stays Elevated?
Deconstructing the "Inflation Hedge" Myth in Modern Markets

A common rule of thumb in investing is that gold acts as the ultimate hedge against inflation. Following this logic, when consumer prices rise globally, capital should naturally flow into hard assets like bullion. Yet, across recent inflationary cycles—including the persistent global pressures seen through mid-2026—gold has frequently stalled or experienced sharp pullbacks.

Why does this disconnect happen? The answer lies in how global central banks respond to inflation, and the macro mechanics of real interest rates.

Here is a breakdown of the structural forces currently driving the global gold market:

🔹 1. The Competition from Real Interest RatesTo combat persistent inflation, major central banks—from the US Federal Reserve and the European Central Bank (ECB) to the Bank of England and Bank of Japan—deploy aggressive monetary policy by raising or holding nominal interest rates high.Because gold is a non-yielding asset (it produces no coupon, dividend, or cash flow), its performance is heavily dictated by opportunity cost. When sovereign bonds (like US Treasuries, German Bunds, or UK Gilts) offer high, inflation-adjusted "real" yields, institutional capital rotates out of zero-yield precious metals and into government debt to lock in guaranteed returns.
🔹 2. US Dollar Strength and Global LiquidityWhile gold is traded globally in various currencies, it is universally benchmarked and priced in US Dollars ($). When global inflation spikes, the Federal Reserve's hawkish policy often drives institutional capital toward higher-yielding US assets, strengthening the Dollar Index (DXY). A stronger dollar makes dollar-denominated bullion more expensive for buyers using other currencies (such as the Euro, Yen, or British Pound), dampening international demand and suppressing global spot prices.
🔹 3. The Time-Horizon Nuance. The reputation of gold as an "automatic" inflation hedge is largely a vestige of the 1970s—a decade when inflation soared while central banks were slow to raise borrowing costs, causing real interest rates to plunge into deeply negative territory.In modern global finance, the correlation depends entirely on your time horizon:
• Short-to-Medium Term: Gold is highly sensitive to real yield competition and central bank rate paths.
• Long Term: Over decades, gold historically preserves purchasing power against fiat currency debasement and systemic risk.💡 The

Macro Takeaway: Gold does not react to inflation in a vacuum; it reacts to monetary policy tightening and the trajectory of real yields. When central banks actively defend price stability with elevated interest rates, cash and sovereign bonds become formidable competitors for global capital.

19/01/2026

I found this worth a read.

A clash between China, Taiwan and the US would dwarf every current conflict – and AI won’t save us

26/11/2025

Inheritance Tax (IHT) – What’s changing from 6 April 2026

Business Property Relief (BPR) and Agricultural Property Relief (APR)
You used to get 100% relief (no IHT) on family businesses and farms of any size.
New rule: First £1 million of qualifying business/farm assets = still 100% relief (0% IHT).
Anything above £1 million = only 50% relief → you’ll pay 20% IHT on the excess instead of 40%, but still double the old zero.
AIM shares (smaller companies listed on the Alternative Investment Market)
Previously 100% IHT-free after holding 2 years.
From April 2026 → only 50% relief (so 20% IHT) even after 2 years.
Pensions
Unspent pension pots will be inside your estate for IHT from April 2027 (this was already announced last year).
Good news that didn’t change
Normal IHT allowance stays £325,000 per person
Extra “home” allowance when passing house to children stays £175,000
7-year gifting rule still works exactly as before (give money away and survive 7 years = no IHT)

Capital Gains Tax – Big change from 6 April 2026

Old rule (“uplift on death”): When someone died, the value of their shares, property, business etc. was reset to the market value on the day they died. Heirs paid zero CGT on all the growth that happened in the previous owner’s lifetime.
New rule: No more reset.
Your heirs inherit your original purchase price.
When they eventually sell, they pay CGT on ALL the growth – including the growth that happened while you owned it.

Example
You bought shares for £100k → they’re worth £1m when you die.

Old way: heirs get them at £1m base cost → sell for £1.2m → pay CGT only on £200k gain.
New way: heirs get them at £100k base cost → sell for £1.2m → pay CGT on £1.1m gain.

Who feels this most?
Family business owners, farmers with land over £1m, people with big investment portfolios or second homes, and anyone who was relying on the “die and wipe out the CGT” trick.
These two sets of changes together will raise about £2 billion a year by the end of the decade – mostly from wealthier estates.

05/08/2025

Why this took so long is a mystery!

The

14/07/2025

Undercover filming and whistleblower testimony reveals how commission is put ahead of customers.

03/04/2025

The recent tariff announcements appear to be more extensive and aggressive than many market participants anticipated. Both the number of affected countries and the tariff rates exceeded expectations, causing significant market volatility.
These tariffs create several economic challenges:

Consumer impact: Tariffs effectively act as taxes on goods, raising prices and reducing purchasing power, which can lead to decreased consumption.
Business uncertainty: Companies need policy stability to make long-term investment decisions about where to produce goods and how to structure supply chains. The current environment of rapid policy changes makes planning difficult.
Market reaction: The negative market response appears rational given the economic implications, with US multinationals potentially facing the greatest impact due to their global operations.
Trade rebalancing challenges: While tariffs can quickly reduce imports by raising prices and lowering demand, increasing US exports will take years as it requires building new manufacturing capacity and reorganizing supply chains.

However, there are reasons to question whether these tariffs will remain in their current form:

Political considerations: As mid-term elections approach, the economic costs to voters may influence policy decisions.
Policy volatility: The administration has already demonstrated willingness to reverse course on policies during its first weeks in office.
Economic pressure: The broader economic impact could create pressure for modification if negative effects become pronounced.

From an investment perspective, these developments suggest the value of regional diversification in portfolios, as we've already seen different magnitudes of impact across global markets. If markets experience steeper declines, this could potentially create buying opportunities for long-term investors.

06/03/2025

Almost one in five (19 per cent) women do not know where to get financial advice from, research from Scottish Widows has revealed.

24/02/2025

St James’s Place took the unenviable top two spots for the largest underperforming funds.