In this Metals Watch, we revisit the theoretical relationship between the price of gold and inflation, before assessing how this relationship has held up throughout history. The key takeaway is that although gold is an effective long-term hedge against inflation, its effectiveness at shorter horizons depends on how long-term expectations for inflation and monetary policy evolve. We think that long-dated real yields will rise somewhat over the next few years, which should be enough to pull down the gold price.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services