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Hedging against inflation best done through Commodities

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NEW YORK (Scrap Register): Commodities are still the best hedge against rising inflation risks, said Goldman Sachs in a snippet.

In a research note, analyst point out that whereas inflation risks had been subdued during the recovery from the financial crisis, market participants are increasingly starting to worry about overheating due to economic growth and increasing labor-market tightness.

In summary, while central-bank inflation targeting has certainly helped to lower overall inflation volatility, there remains one key cause of inflation volatility -- commodity prices, and more specifically, energy prices, Goldman added.

Hedging this risk is best done by investing into the commodities themselves.

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