In an interview with Kitco News, both experts agreed that, under certain conditions, gold is also a hedge against stock market volatility.
Addressing the idea that gold's role as a hedge against inflation means that the price should follow inflation, Christian said that the yellow metal does not hedge on a short-term basis and does not move higher when inflation is consistently at low single digits.
“The correlation between changes in inflation and changes in gold prices is 9%,” he explained. “Gold protects you well against hyperinflation, but it doesn’t protect you particularly well against a sluggish 1-3% inflation.”
For information: hyperinflation is often defined as a monthly price increase of at least 50%.
While Wagner agreed with Christian, he added that gold is a long-term hedge against inflation. "Gold is a great hedge against inflation, but it's not sensitive to short-term moves," he said. "But over time, we see that it has the same purchasing power."
Wagner gave an example to illustrate his point: "In 1910, one troy ounce of gold could buy a night at the Plaza Hotel... you could buy a nice suit... and a steak dinner," he said. According to Wagner, an ounce of gold allows you to buy the same things today.