The Wall Street Journal authorized a study that was carried out by the research firm Ibbotson Associates. After detailed research, they arrived at a correlation value of 0.08 for the period between 1978 and 2010 for the gold rate and inflation. This is as good as no relation. (Correlation value ranges from -1 to 1, -1 being the perfect negative correlation, 1 is the perfect positive correlation and zero is the absence of any correlation).

Another study commissioned by Citibank in 2009 also came to the same conclusion that “there is no obvious relationship between the gold price and inflation”.

As can be seen by studying the three graphs given above, the gold prices somewhat follow inflation at times, but on other occasions, it shows an inverse or a weak relationship with inflation.

Using these data, the only conclusion that can be drawn is that there is no correlation between the gold rate and inflation.