Facts and Fantasies about Gold

Klement, Joachim (2015): Facts and Fantasies about Gold. Published in: Facts and Fantasies about Gold , Vol. 1, No. 1 (9 March 2015): pp. 1-12.

Abstract

Due to the increasing popularity of gold as an investment the demand for effective risk management techniques for gold investments has increased as well. In this paper we analyze several drivers of the price of gold that have been proposed in the past. Our analysis indicates that short-term volatility of the price of gold remains rather unpredictable with many of the explanations like the fund flows in physical gold ETF either unreliable or unstable over time. Our analysis suggests that there is a stable non-linear relationship between the price of gold and changes in inflation rates or real interest rates that might be exploited for risk management purposes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Gold, Inflation, Real Interest Rates, VIX, US Dollar, ETF Fund Flows
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill

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