Forecast: What’s Next for Gold is Always about the US Dollar

The comments below are an edited and abridged synopsis of an article by Kelsey Williams

Since the origin of the Federal Reserve in 1913, the US dollar has lost 99% of its purchasing power.

Forecast: What's Next for Gold is Always about the US Dollar | BullionBuzz | Nick's Top Six
Three gold bars on white background and a stack of $100US banknotes in the background.

Not coincidentally, but in direct reflection of the dollar’s loss in purchasing power, the gold price has multiplied one hundred-fold from $20.67 per ounce to $2,060 per ounce as of August 2020.

A chart shows the ever-increasing price of gold over the past century.

Up for discussion: Gold price linked to US dollar; inflation-adjusted gold prices; and gold—what to expect next.

Conclusion: The value of gold is constant. Its price changes according to changes in actual purchasing power of the US dollar… Higher gold prices usually come after longer periods of time when the cumulative effects of previous inflation become more apparent…If you want to know and understand what is happening to gold’s price, then you need to know and understand what is happening to the US dollar…Changes in the price of gold do not tell us anything about gold. They tell us what is happening to the US dollar.

Leave a Reply

Your email address will not be published.