These charts clearly demonstrate the complexity of the gold market – the factors that influence it are dynamic, changing over time. It is like gold is a melting pot of the diverse views of market participants, which probably accounts for why it has a low to zero correlation to most asset classes.

The problem with all models of the gold price is that you have to forecast what the underlying variables will be to get a forecast for the gold price. Dirk, Joscha & Robert’s work shows that you now have to also forecast the importance of each variable, making the task doubly complicated. Something to keep in mind the next time you see a talking head on TV say that gold is going to go up or down because of their view about one single variable they think explains all.