Financial Times: Why the West Should Be Paying More Attention to the Gold Price Rise
Article by Mohmed El-Erian in Financial Times
Something strange has happened to the price of gold over the past year. In setting one record level after the other, it seems to have decoupled from its traditional historical influencers, such as interest rates, inflation and the dollar. Moreover, the consistency of its rise stands in contrast to fluctuations in pivotal geopolitical situations.
Gold’s “all-weather” characteristic signals something that goes beyond economics, politics and higher-frequency geopolitical developments. It captures an increasingly persistent behavioral trend among China and “middle power” countries, as well as others. And it is a trend that the west should be paying greater attention to.
Over the past 12 months, the price of an ounce of gold on international markets has increased from $1,947 to $2,715, a gain ......