But Eddy Elfenbein presents a fascinating model for evaluating gold's value based not on inflation,
but rather interest rates.
He finds gold acts like a highly-leveraged short position on short-term real interest rates, with a break-even point at 2%. David Merkel responds with a variation on the model, which predicts gold could reach $3000 in mid-2013 if the Fed stays true to its word to keep rates low. Willem Weytjens aims to refine Elfenbein's model as well.
