A scenario-based thinking tool for the gold price
Over long horizons, yes; gold preserves its purchasing power against fiat currencies. However, an increase in inflation does not trigger a simultaneous and proportional rise in the price of gold. The price of gold depends not only on inflation but also on real interest rates, investor demand, and central bank policies. During periods when both inflation and real interest rates are high, such as the 1980s, gold can underperform inflation.
Therefore, gold is not merely an "inflation hedge," but a "confidence hedge." The defining factor is not the inflation rate itself, but the policy response to it and the underlying confidence in fiat currencies.