CHART: One Of The Tightest Correlations To Gold You'll See

Gold prices may be impacted by a variety of factors like inflation, the dollar, fear, etc.

But one of the most powerful factors driving prices is probably jewelry demand, which accounts for more than half of all gold demand.

And jewelry demand has been booming thanks to rising wealth in the emerging markets, where gold offers cultural value.

US Funds’ Frank Holmes’ recent gave a presentation at the World Money Show where he outlined his gold “love trade.”

One of his charts correlated gold prices with the rise of wealth in China and India. And the correlation is pretty tight.  Check out one of the straightest lines you’ll see:

gold chindia

Photo: US Funds


SEE ALSO: CREDIT SUISSE: THE GOLD ERA IS COMING TO AN END >

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.