What can I say about gold that hasn’t been said a thousand times? Not much, really. I have compiled my research some years ago in a paper. In essence, I think gold is predominantly driven by inflation expectations and real rates (with real rates typically being the flip side of inflation expectations priced in bond markets). But this relationship is non-linear and gold reacts far more in situations of extremely negative real rates such as an acute crisis or an unexpected spike in inflation expectations. There is little to no evidence that gold acts as a hedge against Dollar exchange rate fluctuations or to equity market volatility.
It would really be interesting to see if Bitcoin could take over Gold's role. It wasn't really the case during the first Covid crisis but could investors opinion of Bitcoin have changed? Both gold (or Bitcoin) both work as insurance against crises because enough people believe they will.
It would really be interesting to see if Bitcoin could take over Gold's role. It wasn't really the case during the first Covid crisis but could investors opinion of Bitcoin have changed? Both gold (or Bitcoin) both work as insurance against crises because enough people believe they will.
Interesting study. The authors should go back further in history to back-test gold’s role in pre- & post-gold standard periods.