Gold prices, cost of carry, and expected inflation
AbstractHow 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.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economics and Business.
Volume (Year): 62 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/jeconbus
Inflation Bond yield Gold Cost of carry;
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