Last week, gold prices broke out from their consolidation, climbing steadily upward. The metal closed the week at $1,974.90 per ounce. This move was the result of two major inflation reports that came out last week. First, the consumer price index (CPI), which measures retail inflation, jumped to a 40-year high, rising 8.5% in March from the same month a year ago. A few days later, the producer price index (PPI), which measures wholesale inflation, surged 11.2% from a year ago, its biggest gain on record. The Federal Reserve said that it thinks inflation has peaked for the year and that it expects inflation to subside to the Fed’s 2% target level by year-end. Whether this is true remains to be seen. Accordingly, the Fed announced a 0.25% interest rate increase, bringing the rate from 0% to 0.25%. It also indicated that there would be further rate hikes of 0.50% coming during the year, bringing this year’s total to about 2.25%. Investors may want to consider adding gold to their portfolios to hedge against this persistent inflation. Rick Andrews is president of Avant Capital Management.