In 2018 we published a 3-part series “Gold Price Framework Vol. 2: The Energy Side of the Equation” in which we presented our revised gold price model (part 1), took a deeper dive into the link between
For those unfamiliar with our model, we recommend reading at least part 1 to get a better understanding of our findings in this report. In a nutshell, we found that the majority of changes in gold prices can be explained by just three drivers: Central bank policy (more specifically real-interest rate expectations and QE), changes in longer-dated energy prices, and central bank net gold purchases (the least important driver). These three drivers can explain over 80% of the year-over-year changes in the gold price (see Exhibit 1).
- Source, James Turk's Goldmoney