Speculation that the U.S. Federal Reserve is set to fire up the U.S.-dollar printing press has heightened the already fervent interest in precious metals investments. A look at the relationship between global money supply and the gold price suggests the interest is justified.
The chart on the left shows the year-over-year change in the gold price in U.S. dollars vs. a weighted average of money supply growth for the euro zone, U.S., China, Japan, India and Britain. (Combined, these countries account for 68 per cent of global gross domestic product, according to the International Monetary Fund.)Report Typo/Error