IDEAS home Printed from https://ideas.repec.org/a/taf/ufajxx/v76y2020i4p134-142.html
   My bibliography  Save this article

Gold, the Golden Constant, and Déjà Vu

Author

Listed:
  • Claude Erb
  • Campbell R. Harvey
  • Tadas Viskanta

Abstract

Currently, the real, or inflation-adjusted, price of gold is almost as high as it was in January 1980 and August 2011. Since 1975, periods of high real gold prices have occurred during periods of elevated concern about high future price inflation. Five years after the real price peaks in January 1980 and August 2011, the nominal (real) prices of gold fell 55% (67%) and 28% (33%), respectively. Today’s high real price of gold suggests that gold is an expensive inflation hedge with a low prospective real return. The financialization of gold ownership by exchange-traded funds, however, may introduce a period of irrational exuberance.Disclosure: The authors report no conflicts of interest. The views expressed here do not necessarily reflect those of Tadas Viskanta’s employer, Ritholtz Wealth Management. Ritholtz Wealth Management may hold positions in securities mentioned herein.Viewpoint is an occasional feature of the Financial Analysts Journal. This piece was not subjected to the peer-review process. It reflects the views of the authors and does not represent the official views of the Financial Analysts Journal or CFA Institute.

Suggested Citation

  • Claude Erb & Campbell R. Harvey & Tadas Viskanta, 2020. "Gold, the Golden Constant, and Déjà Vu," Financial Analysts Journal, Taylor & Francis Journals, vol. 76(4), pages 134-142, October.
    • Handle: RePEc:taf:ufajxx:v:76:y:2020:i:4:p:134-142
    DOI: 10.1080/0015198X.2020.1817698
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/0015198X.2020.1817698
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0015198X.2020.1817698?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ufajxx:v:76:y:2020:i:4:p:134-142. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ufaj20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.