> Isn’t it just inflation. As time passes there is more fiat in circulation, which means fiat is worth less, which means you need more fiat to buy the same amount of gold.
Gold was absolutely flat between 2012 and 2022:
* https://www.apmex.com/gold-price
but USD money supply was increasing during that decade:
* https://fred.stlouisfed.org/series/M2SL
See also flatness of gold prices from 1982 to 2002 with an increasing money supply. An older article:
> Sure, there were periods when gold was rising in tandem with the money supply, e.g. in the 1970s and 2000s. However, the yellow metal was in a bear market during the 1980s, 1990s and since 2011, despite the rising money supply (as indicated by the orange rectangles). The price of gold has fallen since 2011 by more than one-third, while the monetary base has increased by half and the M2 supply has risen by more than 25 percent.
* https://www.goldpriceforecast.com/explanations/gold-money-su...
There is little correlation between the two.
I'm surprised that no one is mentioning the direct effect of petrodollar (or lack thereof).
The gold price drastic increase and USD worst decline is to be be expected, and it's mainly due to the end of petrodollar agreement discussed on HN last year [1]. Somehow the Nasdaq news link is dead now but the Firstpost news is a similar one [2]. The top comment is a golden example of denial (pardon the pun), "This is itself inconsequential" [3]. This can be another Dropbox comment moment of HN. The comment also predicted that "Things will keep running as today probably for the next 20 years", and here we are in just after a year.
The negative effect to USD due to the end of petrodollar is imminent and the writing is on the wall for the gold price to increase sharply when there is no more petrodollar.
[1] U.S.-Saudi petrodollar pact ends after 50 years (325 comments):
https://news.ycombinator.com/item?id=40673567
[2] What was the US-Saudi petrodollar deal that lapsed after 50 years?
https://www.firstpost.com/explainers/what-was-the-us-saudi-p...
[3] U.S.-Saudi petrodollar pact ends after 50 years (top comment):
https://news.ycombinator.com/item?id=40674911
I think you may have misread "fiat" as "flat" :)
Hmm, even the kerning on my browser makes them look fairly similar.
F-I-A-T versus F-L-A-T
Hope this helps!
> I think you may have misread "fiat" [with-i] as "flat" [with-l] :)
I did not. The data I linked to shows that there is no historical, long-term correlation between M2 and gold prices.