Gold News

Report: Gold can predict inflation

Gold could be used to predict inflation, according to a report in the Canadian Financial Post.

Commentator David Berman noted that some believe the gold price can predict the arrival of inflation well into the future.

He cited a release from the Bank of Canada, whose Greg Tkacz said that gold can predict inflation in various economies.

"Gold seems to be most significant for developed countries that have formally adopted inflation targets," he said in a report, implying that it works best as a predictor of inflation in countries like Australia, Canada, the UK and China.

"The explicit inflation target acts as an anchor for inflation expectations," Mr Berman writes. "However, Mr Tkacz said it also works for two developed countries that do not have formal inflation targets: Japan and the United States."

The report found that, if the gold price rises by ten per cent, the consumer price index in Canada will increase by one quarter of a percentage point over the following 12 months.

Gold is often used as a hedge against volatility in the US economy, with investors preferring its solid performance over centuries to the fluctuations of the dollar.
ADNFCR-1047-ID-18188178-ADNFCR

See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

 

Market Fundamentals