Impact of Fiat Money on Gold Prices

Gold prices closed at $1,775.80 yesterday in New York. As a safe haven asset class investors have sought shelter in gold during turbulence in equity markets for years and more recently gold prices shot up after the financial crisis. Over the long-term gold has rewarded investors extremely well. With the introduction of fiat money gold prices really took off and continues to go upwards.

The following chart shows the effect of forty years of fiat money over gold prices:

Click to enlarge

Source: The Challenges of Economic Thinking in Practice, Deutsche Bank Research

Related ETF:

SPDR Gold Trust (GLD)

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