| The price of gold is moved by a combination of supply, demand and investor behavior. That seems simple enough, but the way those factors work together is sometimes counterintuitive. Many investors, for example, think of gold as an inflation hedge. That has some common sense plausibility — paper money loses value as more is printed. But the supply of gold is relatively constant. As it happens mining doesn't add much year to year.
Two economists, Claude B. Erb of the National Bureau of Economic Research and Campbell Harvey, a professor at Duke University's Fuqua School of Business, studied the price of gold in relation to several factors. It turns out gold doesn't correlate well to inflation...............................................Full Article: Source
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