Why Isn't the Gold Price Higher?

Abstract

The price of gold is little changed from the levels at which it opened the year, although it did move higher in the first half of March, up around 12.5% from the opening price in January, before slipping back again.

This has confounded some analysts who had expected the price of gold to move inexorably higher partly because of inflation, partly because of economic uncertainty and partly because of geopolitical uncertainty.

Gold isn’t a great inflation hedge-
However, these expectations were based on misconceptions of how the price of gold has reacted to comparable events across a history that can be traced back almost 3,000 years. We’ve pointed out on many occasions that gold is not a uniform, consistent hedge against inflation.

Keywords: Gold, Inflation, Gold price, Risk, Hedge, Correlation, Geopolitical risk