Report
Gold price and flight from money
A very expansionary monetary policy can first push down long-term interest rates sharply , and cause savers / investors to switch to money ( which provides the same return as bonds , without risk ). But in addition, it can also lead to loss of confidence in money , whose quantity becomes too abundant, and to flight from money: savers/investors then get rid of the money they hold to buy real assets whose value is not jeopardised by expansionary monetary policies. We then analyse trends in the gold price, since gold is definitely one of these real assets (together with real estate, infrastructure, cryptocurrencies, etc.) that are purchased in the event of a flight from money. The gold price is actually correlated with sharp falls in interest rates that can trigger a flight from money.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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