Gold in U.S. dollars (which is what I think you mean by “go up.”) is not inversely related to U.S. GDP (which is what I think you mean by “economy.”). For example, the U.S. GDP and Gold are both up in 2014.
There are many reasons they aren’t inversely related. But one of them is that everyone in the world values gold. Central banks of all countries could store diamonds or silver or platinum or tulips, but they don’t. Gold is the way the world stores wealth. But the U.S. economy is only 1/4th of the world’s economy and dropping steadily. So even if you were correct and the price of gold in U.S. dollars was affected by the U.S. economy, that effect would be offset by the other 3/4ths of the world’s economy.
On a side note: I suspect that in our lifetime, we’ll see the U.S. economy fall to only 10% of the world’s economy.
As Americans (I’m guilty of this myself) it’s difficult not to value something by counting the number of U.S. dollars it takes to buy it. It’s deceiving to value gold (of which there is only so much of) in U.S. dollars (of which there is a never-ending, growing supply of).
Anyway if you are looking for something gold mirrors (wouldn’t that be awesome, we’d then know where gold is going!!!)… there is something. It’s money supply (and the Fed keeps printing). See chart:
But Gold based in comparison to Dollar amounts means nothing.
You could say Gold went up 10% based on what . . . .dollar amounts ?
If the price of bread jumped 50% and gold jumped 10% in dollars then you actually lost 40% of your Gold value…get it ?
Fact is throughout history doesn’t the price pretty much remain stable and not really a great investment like Real Estate .
Never will I read about all the self made millionaires who did it with Gold investment.
Now Real Estate is where the big money is made and as a Home Inspector I am shocked you are not up on that .
