%0 Journal Article
%A Erb, Claude B.
%A Harvey, Campbell R.
%T The Golden Constant
%D 2017
%R 10.3905/joi.2017.26.1.094
%J The Journal of Investing
%P 94-100
%V 26
%N 1
%X In The Golden Dilemma, Erb and Harvey explored the possible relation between the real, inflation-adjusted price of gold and future real gold returns. This update suggests that the real return of gold over the next 10 years could be about –4% per year if the real price of gold mean reverts, or –12% per year if the real price of gold overshoots and declines to previous low, real price levels. This view reflects a golden constant hypothesis that inflation is the fundamental driver of the price of gold. Of course, it is possible to entertain other hypotheses. A golden constant perspective suggests a fair value price for gold of $840 per ounce and a possible overshoot price of $353 per ounce.TOPICS: Commodities, wealth management
%U https://joi.pm-research.com/content/iijinvest/26/1/94.full.pdf