Modelling A.I. in Economics

Relationship Between Inflation and Gold

ABSTRACT

In general, gold prices tend to rise when there is inflation because gold is often viewed as a hedge against inflation. This is because when the value of currency decreases due to inflation, the purchasing power of that currency decreases as well, which can lead people to seek out alternative stores of value like gold. When people start buying more gold as a hedge against inflation, the demand for gold increases, which can drive up its price. Additionally, some investors may view gold as a safe haven asset during times of economic uncertainty or market volatility, which can also lead to an increase in demand and price.


However, it's important to note that there are many factors that can influence the price of gold, including geopolitical events, interest rates, and market sentiment, so inflation is just one factor to consider.


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