@article {Erb94, author = {Claude B. Erb and Campbell R. Harvey}, title = {The Golden Constant}, volume = {26}, number = {1}, pages = {94--100}, year = {2017}, doi = {10.3905/joi.2017.26.1.094}, publisher = {Institutional Investor Journals Umbrella}, abstract = {In The Golden Dilemma, Erb and Harvey explored the possible relation between the real, inflation-adjusted price of gold and future real gold returns. This update suggests that the real return of gold over the next 10 years could be about {\textendash}4\% per year if the real price of gold mean reverts, or {\textendash}12\% per year if the real price of gold overshoots and declines to previous low, real price levels. This view reflects a golden constant hypothesis that inflation is the fundamental driver of the price of gold. Of course, it is possible to entertain other hypotheses. A golden constant perspective suggests a fair value price for gold of $840 per ounce and a possible overshoot price of $353 per ounce.TOPICS: Commodities, wealth management}, issn = {1068-0896}, URL = {https://joi.pm-research.com/content/26/1/94}, eprint = {https://joi.pm-research.com/content/26/1/94.full.pdf}, journal = {The Journal of Investing} }