Gold Inflation Relationship: <br />None<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />Conventional wisdom suggests that there is a strong correlation between gold and inflatio...
GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />Let’s look at three charts <br />They track the gold price in US$ per ounce and the month...
GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />Fact 1: Bull Market<br />1974 until January 1980, gold went up from US$ 129 (monthly aver...
GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br /><ul><li>Fact 2: Bear Market
Between 1980 and April 2001, gold went down from US$ 675 to US$ 260 per ounce, which is a decrease of 67%
In contrast, the consumer price index increased during the same period by around 126%</li></ul>www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />Fact 3: Bull Market<br />From 2001 to February 2011, the gold rate experienced huge gains...
GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />Especially remarkable is the inflation decrease in the middle of 2008<br />If the theory ...
GOLD INFLATION RELATIONSHIP<br />All of this points towards a weak or even non-existing relationship between the gold pric...
GOLD INFLATION RELATIONSHIP<br />What do others say about a possible correlation?<br />www.goldratefortoday.org<br />
GOLD INFLATION RELATIONSHIP<br />First, the Wall Street Journal commissioned a study from the research firm Ibbotson Assoc...
GOLD INFLATION RELATIONSHIP<br />Second, also Citibank comes in 2009 to the conclusion that “there is no obvious relations...
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Gold Inflation Relationship: None

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Conventional wisdom suggests that there is a strong correlation between gold and inflation. But this is wrong ...

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Gold Inflation Relationship: None

  1. 1. Gold Inflation Relationship: <br />None<br />www.goldratefortoday.org<br />
  2. 2. GOLD INFLATION RELATIONSHIP<br />Conventional wisdom suggests that there is a strong correlation between gold and inflation <br />When inflation goes up, gold follows suit. Likewise, a drop in inflation would lead to a fall in the gold price <br />This is because in times of high inflation, gold becomes a better option for investors <br />But this is wrong<br />www.goldratefortoday.org<br />
  3. 3. GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
  4. 4. GOLD INFLATION RELATIONSHIP<br />Let’s look at three charts <br />They track the gold price in US$ per ounce and the monthly US Consumer Price Index, which is a gauge for inflation<br />The first chart goes from 1974 until 1980 which was a bull market for gold<br />The second chart shows the 21-year bear market from 1980 to 2001<br />On the last chart, the current bull market is seen, which stated in 2001<br />www.goldratefortoday.org<br />
  5. 5. GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
  6. 6. GOLD INFLATION RELATIONSHIP<br />Fact 1: Bull Market<br />1974 until January 1980, gold went up from US$ 129 (monthly averages) to US$ 675 per ounce at the end of the period<br />This is an increase of 353%<br />During the same time, the consumer price index, a measure of inflation increased by 67%<br />Here, gold strongly outpaces the inflation development<br />www.goldratefortoday.org<br />
  7. 7. GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
  8. 8. GOLD INFLATION RELATIONSHIP<br /><ul><li>Fact 2: Bear Market
  9. 9. Between 1980 and April 2001, gold went down from US$ 675 to US$ 260 per ounce, which is a decrease of 67%
  10. 10. In contrast, the consumer price index increased during the same period by around 126%</li></ul>www.goldratefortoday.org<br />
  11. 11. GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
  12. 12. GOLD INFLATION RELATIONSHIP<br />Fact 3: Bull Market<br />From 2001 to February 2011, the gold rate experienced huge gains of 527 per cent<br />The overall inflation rate was only 25 per cent<br />www.goldratefortoday.org<br />
  13. 13. GOLD INFLATION RELATIONSHIP<br />www.goldratefortoday.org<br />
  14. 14. GOLD INFLATION RELATIONSHIP<br />Especially remarkable is the inflation decrease in the middle of 2008<br />If the theory of a positive correlation held true, the gold price would also go down<br />But the opposite was the case: inflation went down, and gold went up<br />This rather points to an inverse correlation between gold and inflation<br />www.goldratefortoday.org<br />
  15. 15. GOLD INFLATION RELATIONSHIP<br />All of this points towards a weak or even non-existing relationship between the gold price and the inflation rate<br />www.goldratefortoday.org<br />
  16. 16. GOLD INFLATION RELATIONSHIP<br />What do others say about a possible correlation?<br />www.goldratefortoday.org<br />
  17. 17. GOLD INFLATION RELATIONSHIP<br />First, the Wall Street Journal commissioned a study from the research firm Ibbotson Associates<br />According to their research, between 1978 and 2010 gold and the inflation rate have a correlation value of 0.08<br />This is nearly no correlation (on a scale ranging from -1 to 1, where 1 is perfect correlation, and -1 perfect negative correlation, and zero is the absence of a relationship) <br />www.goldratefortoday.org<br />
  18. 18. GOLD INFLATION RELATIONSHIP<br />Second, also Citibank comes in 2009 to the conclusion that “there is no obvious relationship between the gold price and inflation”<br />Sometimes the development of gold follows inflation, at other times there is an inverse trend or just on obvious pattern at all<br />www.goldratefortoday.org<br />
  19. 19. GOLD INFLATION RELATIONSHIP<br />Therefore, it can be concluded that there is no, or only a weak, relationship between the gold rate and inflation levels<br />www.goldratefortoday.org<br />
  20. 20. Visit my blog:<br />www.GoldRateForToday.org<br />Live Gold Rates, <br />Independent Trading Advise <br />and many Resources <br />about Gold Investing<br />Interested in More?<br />www.goldratefortoday.org<br />
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