The Silent Thief
Inflation is not prices going up. It is the value of your money going down. Gold is the mirror that reflects the true state of the currency.
The Mechanism
When the money supply (M2) expands faster than the production of goods and services, each unit of currency becomes worth less.
Gold cannot be printed. Its supply grows at a slow, steady rate (mining). Therefore, as the pool of paper money floods the system, it takes more paper to buy the same ounce of gold.
The Lag Effect
Gold does not always track CPI month-to-month. It tracks monetary debasement over the long term.
In the 1970s, inflation raged for years before gold made its parabolic move from $35 to $850. Patience is key.
Protecting Purchasing Power
In 1920, a $20 gold piece bought a fine tailored suit. Today, that same gold coin (worth ~$2,000+) still buys a fine tailored suit. The $20 bill? It might buy the socks.