Strategists at Natixis look at periods when gold prices have risen significantly and identify four usual explanations for a rise in the yellow metal. Key quotes “The first explanation is expected inflation, which drives savers into gold as a safe-haven against a loss of the value of money. The rise in the gold price of 1973-75 and 1978-81 can be attributed to inflation.” “The second usual explanation is a depreciation of the dollar: gold is then a substitute for the dollar as a reserve currency. The rise in the gold price in 1973 to 1975, 1978 to 1981, 1987-88, 2002 to 2012 and 2020 can be attributed to dollar depreciation.” “The third explanation is a rise in risk aversion and, as a result, an equity market decline, resulting in investors switching from equities to gold. The rise in the gold price can be linked to the fall in stock market indices in 1987-88, from 2009 to 2012 and in 2020.” “A fourth explanation is an excessive increase in the quantity of money, which leads to a loss of confidence in money to store savings. This can be the quantity of money in the United States (in dollars) or in the OECD as a whole. Rapid money supply growth may explain the rise in the gold price from 2009 to 2012 and in 2019-2020.” “The rise in the gold price in the recent period (since March 2020) can be attributed to dollar depreciation, falling share prices and monetary expansion.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next USD/CHF jumps to the highest level since early August, around 0.9220-25 area FX Street 2 years Strategists at Natixis look at periods when gold prices have risen significantly and identify four usual explanations for a rise in the yellow metal. Key quotes “The first explanation is expected inflation, which drives savers into gold as a safe-haven against a loss of the value of money. The rise in the gold price of 1973-75 and 1978-81 can be attributed to inflation.” “The second usual explanation is a depreciation of the dollar: gold is then a substitute for the dollar as a reserve currency. The rise in the gold price in 1973 to 1975, 1978 to 1981, 1987-88, 2002… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.