Commodities as an inflation hedge delivered very different results depending on which commodity an investor held and when. Between December 2020 and August 2026 the U.S. Consumer Price Index rose 27.5%, from 262.045 to 334.131, according to DataPorium economic data [1]. Over roughly the same period gold rose from a 2021 annual average of $1,801 per ounce to $4,298 on September 24, 2026, a gain of 139%; COMEX copper rose from $4.24 to $6.72 per pound, up 58%; and WTI crude rose from a 2021 average of $68.13 to $94.61 per barrel, up 39% [3][4][5][6]. Silver did best of all, up 152% from $25.23 to $63.46 [5][6]. Every major commodity beat inflation over the full period, yet each spent long stretches failing to do so. This note lays out what the five and a half years actually showed.
The inflation record, 2021 to 2026
Inflation arrived in two waves. The CPI rose 7.2% during 2021, from 262.045 in December 2020 to 280.806 in December 2021, then peaked at a 12-month rate of 9.0% in June 2022, when the index reached 295.072 against 270.71 a year earlier [1]. It cooled to 6.4% during 2022, 3.3% during 2023 and 2.9% during 2024, measured December to December [1]. The second wave is under way now: the Bureau of Labor Statistics reported the all-items index up 3.4% in the 12 months to August 2026, with energy up 16.3% and gasoline up 27.4%, while the core index excluding food and energy rose only 2.4% [2].
The distinction matters for hedging. The 2021 to 2022 wave was broad, spanning goods, services and shelter after a period of very rapid money growth and fiscal expansion. The 2026 wave is narrow and energy-led, following supply disruptions in the Middle East. A hedge that works against one may not work against the other.
Gold: the best long-run hedge, but not in 2022
The U.S. Geological Survey's annual average gold price series is the cleanest record. Gold averaged $1,801 per ounce in 2021, $1,802 in 2022, $1,945 in 2023, $2,388 in 2024 and an estimated $3,300 in 2025, the last a 38% gain and a record [3]. Futures closed at $4,298.00 on September 24, 2026, after peaking at a record close of $5,318.40 on January 29 [6].
The lesson is in the middle of that series. In 2022, the year inflation peaked at 9%, gold was flat: $1,802 against $1,801 [1][3]. Rising real interest rates and a strong dollar offset the inflation impulse. Gold then rose 8% in 2023, 23% in 2024 and 38% in 2025, years when inflation was falling toward 3% [1][3]. Gold protected purchasing power over the full period by a wide margin, but it did so with a lag of two to three years and with a 22% drawdown in 2026 [6]. Investors who bought gold in early 2021 specifically to hedge the 2022 inflation spike were disappointed for two years before being vindicated.
Oil and copper: hedges that track the cycle
Energy is the commodity most directly tied to the CPI, and it shows. WTI averaged $39.16 in 2020, $68.13 in 2021 and $94.90 in 2022, the inflation peak year, before falling to $77.58 in 2023, $76.63 in 2024 and $65.39 in 2025 [4]. In 2026 the monthly average reached $100.32 in April before easing to $83.90 in August, and futures closed at $94.61 on September 24 [4][6]. Oil hedged the 2022 wave almost perfectly and is doing the same in 2026, because oil is the inflation this time. It hedged nothing in 2023 to 2025, when it fell 31% while the CPI rose more than 8% [1][4].
Commodity prices versus the CPI, 2021 to September 2026
| Measure | 2021 average | 2022 average | 2025 average | September 24, 2026 | Change since 2021 |
|---|---|---|---|---|---|
| CPI (index, Dec 2020 to Aug 2026) | 262.0 | 298.8 (Dec 2022) | 323.4 (Aug 2025) | 334.1 (Aug 2026) | +27.5% |
| Gold ($/oz) | 1,801 | 1,802 | 3,300 | 4,298.00 | +139% |
| Silver ($/oz) | 25.23 | 21.88 | 38 | 63.46 | +152% |
| Copper, COMEX ($/lb) | 4.24 | 4.01 | 4.80 | 6.72 | +58% |
| WTI crude ($/bbl) | 68.13 | 94.90 | 65.39 | 94.61 | +39% |
Sources: DataPorium CPI series and futures closes; EIA annual WTI spot; USGS Mineral Commodity Summaries 2026 for annual gold, silver and copper prices [1][3][4][5][6].
Copper sits between the two. The COMEX price averaged $4.24 in 2021, $4.01 in 2022, $3.86 in 2023 and $4.22 in 2024 before rising to a record $4.80 in 2025 and $6.72 on September 24, 2026 [5][6]. Copper fell during the 2022 inflation peak because markets priced a growth slowdown, then rallied on electrification demand and tight supply. Its 58% gain since 2021 is a demand story more than an inflation story.
What the period teaches about hedging
- Breadth beats concentration. Gold, silver, copper and oil each had multi-year stretches of losing to inflation, but a basket of the four never fell far behind the CPI for long.
- Know which inflation you are hedging. Energy-led inflation, as in 2026, is hedged by energy; broad monetary inflation, as in 2021 to 2022, was eventually hedged best by precious metals.
- Time horizon is everything. Over five years every commodity beat the 27.5% rise in prices; over any single year, at least one of them failed.
- Volatility is the price of protection. Gold's 22% drawdown in 2026 and oil's 31% fall from 2022 to 2025 are the cost of holding assets that respond to inflation surprises [4][6].
The counterpoint deserves weight. Commodities pay no income, and a diversified equity portfolio or inflation-indexed Treasury bonds also preserved purchasing power over this period with less drama. Sound money and restrained fiscal policy, not commodity speculation, are the durable answer to inflation; commodities are a hedge against the failure of that discipline. Investors may consider a modest, diversified commodity allocation as insurance rather than a core holding, and may treat the 2021 to 2026 record as evidence that the insurance pays out on its own schedule, not the investor's.
From 2021 to 2026 every major commodity beat a 27.5% rise in consumer prices, but none of them did so every year, and gold sat flat through the 2022 inflation peak.
Key takeaways
- The CPI rose 27.5% from December 2020 to August 2026, with the 12-month rate peaking at 9.0% in June 2022 and running 3.4% in August 2026 [1][2].
- Gold rose 139% from its 2021 average to $4,298 on September 24, 2026, but was flat in 2022 when inflation peaked [3][6].
- WTI tracked the two inflation waves closely, averaging $94.90 in 2022 and trading at $94.61 in September 2026, but fell 31% from 2022 to 2025 [4].
- Copper gained 58% and silver 152% since 2021, driven as much by electrification and supply deficits as by inflation [5][6].
- A diversified basket and a multi-year horizon were the difference between a hedge that worked and one that did not.
Frequently asked questions
Do commodities protect against inflation?
Over 2021 to 2026, yes: consumer prices rose 27.5% while gold gained 139%, silver 152%, copper 58% and oil 39%, but each commodity lagged inflation for at least one multi-year stretch, so the protection depended on holding period and diversification [1][3][4][5][6].
Was gold a good inflation hedge in 2022?
No. Gold averaged $1,802 in 2022 against $1,801 in 2021 while the CPI rose 6.4% during the year and the 12-month rate peaked at 9.0% in June 2022; gold's gains came later, in 2024 and 2025 [1][3].
What is US inflation as of August 2026?
The Bureau of Labor Statistics reported the CPI up 3.4% over the 12 months to August 2026, with energy up 16.3%, gasoline up 27.4%, food up 2.7% and core inflation at 2.4% [2].
Which commodity tracked inflation most closely from 2021 to 2026?
Crude oil. WTI averaged $94.90 in the 2022 inflation peak year and traded near $94.61 in September 2026 during the energy-led inflation wave, but it fell to $65.39 in 2025 while prices kept rising [4][6].
Sources & References
- [1] DataPorium Economic Metrics: Consumer Price Index
- [2] Bureau of Labor Statistics, Consumer Price Index Summary, August 2026
- [3] USGS, Mineral Commodity Summaries 2026: Gold
- [4] EIA, Cushing OK WTI Spot Price FOB, Annual
- [5] USGS, Mineral Commodity Summaries 2026: Copper and Silver
- [6] DataPorium Commodities: Gold, Silver, Copper and WTI futures
