Soaring Above India’s Poverty, a 27-Story Home

The charts look like fill in forms. Not sure if that is what was supposed to display

At this link you can see the actual fluctuations in various currencies. They begin in January of 1971 and continue to the present year.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/india/33023-soaring-above-india-s-poverty-27-a.html

http://goldprice.org/30-year-gold-price-history.html

In my own experience, this is the highest gold has sold from the time of the Gulf Oil Crisis in the Carter administration.

Posting two charts for the US$$ and the India rupee. Other currencies are available at the link. **

 
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Now I have a question. The USD chart and the Indian rupee chart begin to look very similar starting around January 2008. Otherwise they are very different.

Does the convergence occur because of changes in the monetization of the rupee? Or the result of changes in monetary policy in India? Or are they the result of structural changes in financial markets in India? Or some other reason?

Gold has increased by more than 400% in the past 12 years not 2...apologies for the mistake.

it is a whole range of things coming together to make the most recent uptick.

Most of it has to do with the increased consumption of gold itself. (scrap gold, ie jewelry, makes up the majority of consumption, not gold investment coins, biscuits and bricks held by central banks, governments and or investment banks)

major consumers of jewelry are India and China. western retail apetites for scrap gold were always modest. and it is well known that growth of a middle class in india and china are increasing demand for gold as well.

this means that no matter what currency you held (even if that countries major export was gold), gold would have out-performed it, not due to monetization of a currency, but primarily because of increased consumption of the resource itself.

secondly, we have to look at the increased price of production, due to higher energy costs (of, exploration, ore extraction and then processing)...also factor in resource depletion...and you have higher gold value.

After these few variables are factored in (which are the major variables) we can get a picture of how much monetization of currencies themselves has affected the price of gold (we do this by looking at a range of currencies). Some currencies performed better than others.

for example over a 10 year period

gold price with the US dollar has gone up 425% in the past 10 years

gold price with the Canadian Dollar (which is a country that is a net producer) it has gone up only 243% in 10 years.

gold price relative to the Ruppee has gone up 395% in 10 years

gold price relative to the chinese yuan has gone up only 192% (despite the chinese artificially lowering their currency)

http://www.goldprice.org/spot-gold.html