The price of gold shot up last Thursday (February 24) when news broke that the Russian invasion of Ukraine had begun. The metal settled down the next day but remained in a strong uptrend, closing the week at $1,887.60 per ounce. The Federal Reserve has recognized that inflation is here to stay and must be dealt with, which it had started planning to do by raising interest rates. But the Fed’s job got harder last week. The U.S. has responded to Russia’s invasion of Ukraine by imposing sanctions, which has caused a major jump in oil prices. This will lead to higher gas prices and higher U.S. inflation. Fox Business reports, “The war in Europe—which has shattered nearly three decades of peace on the continent—could ultimately cause oil prices to surge as much as 20% to $120 a barrel, according to RSM chief economist Joe Brusuelas. Should that happen, consumer prices in the U.S. would surge above 10% on an annual basis, the economist said, the highest since October 1981.” This could lead to an economic slowdown that would then bring into question the Fed’s current plan to fight the existing inflation. We are looking at a real possibility of inflation getting out of control despite efforts to contain it. Gold has historically been a hedge for investment portfolios against such a scenario. Rick Andrews is president of Avant Capital Management.