Gold prices, cost of carry, and expected inflation

Laurence E. Blose

Journal of Economics and Business, 2010, vol. 62, issue 1, 35-47

Abstract: How do changes in expected inflation affect gold prices? Using unexpected changes in the Consumer Price Index (CPI) this paper shows that surprises in the CPI do not affect gold spot prices. The results indicate that investors anticipating changes in inflation expectations should design speculation strategies in the bond markets rather than the gold markets. Additionally, investors cannot determine market inflation expectations by examining the price of gold.

Keywords: Inflation; Bond; yield; Gold; Cost; of; carry (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (95)

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