Abstract
Investors buy non-sovereign stores of value such as gold and bitcoin despite the absence of a yield. This paper presents an equilibrium model for studying investor adoption and the pricing of non-sovereign stores of value. The model is used for the quantitative analysis of historical gold prices and real interest rates. Since 1975, the real price of gold has been negatively related to real rates on Treasuries, but only when real rates have been low. The model is consistent with this nonlinear relation and can match quantitative properties relating real interest rates and gold prices. The model can also replicate some key properties of CME Comex gold futures prices.
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