Gold, Oil and & Inflation
I have a quick question about how inflation affects the prices for oil, gold, and other commodities.
I know that during turbulent times (economic crises & inflation) gold is percieved as a "safe heaven" and as an inflationary hedge against a declining dollar. Oil and other tangible assets serve similar purposes.
My question is: why does the price of oil, gold, real estate, commodities, etc, rise when the value of the dollar declines?
Is it because demand for these assets rises rapidly (and thereby pushes the market price up) or is it because sellers raise their selling price to compensate for the "real loss" of a declining dollar (since most commodities are denominated in dollars)?
I'm not 100% sure which of these market forces is stronger when it comes to influencing the market price of gold and oil.
Thanks for the help.
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