Gold futures rose in all four monetary episodes examined in a September 2026 report from The Prehn Institute, including a period when the Federal Reserve’s balance sheet contracted. The cumulative increases ranged from 20 to 143 per cent, while gold’s position relative to the S&P 500 and consumer prices differed across the periods. Felix Nikolas Prehn, economist and former investment banker, examines these comparisons in “The Hidden Regressive Tax”, issued by the independent research institution he founded.
Four monetary episodes and their dates
Gold futures are compared with six other measures across four monetary episodes. The paper sets out figures for changes in the Fed’s total assets, the M2 money stock, consumer prices, hourly earnings, house prices and the S&P 500. Each set of figures covers the dates assigned to its episode, allowing gold to be compared with the other measures over the same months.
According to the paper, posted on Zenodo, the first period covers three Federal Reserve asset purchase programmes from September 2008 to December 2014. The second covers near-zero policy rates from December 2008 to December 2015. The pandemic programme runs from February 2020 to March 2022, while the fourth period, labelled the aftermath, extends from January 2021 to August 2026. The four episodes are not consecutive segments of one timeline.
In the first three periods, the Fed’s total assets increased by 393, 113 and 115 per cent, while M2 rose by 49, 51 and 41 per cent, respectively. The two series measure different things: Fed assets indicate the size of the central bank’s balance sheet, whereas M2 represents a broader stock of money. Felix Nikolas Prehn assesses both alongside the recorded changes in consumer prices, wages, gold and shares.
Gold in the three expansion episodes
During the 2008 to 2014 asset purchase programmes, gold futures rose 35 per cent. The S&P 500 rose 77 per cent and consumer prices increased 8 per cent over the same months.
The near-zero-rate period recorded a 20 per cent increase in gold futures, the smallest of the four episodes. The S&P 500 climbed 126 per cent over the same months, its largest rise across the first three windows, while consumer prices increased 12 per cent.
During the pandemic programme, gold futures rose 25 per cent, compared with increases of 53 per cent for the S&P 500 and 11 per cent for consumer prices. Across all three expansion episodes, gold increased more than consumer prices but less than the S&P 500.
Other measures in the paper’s table show different patterns: the Case-Shiller house-price index increased by 3, 15 and 38 per cent across the three episodes, respectively. Gold futures rose more than house prices in the first two periods, but less during the pandemic programme. Hourly earnings for production workers increased by 14, 15 and 13 per cent; gold’s increase was larger in each case. Unlike gold futures and house prices, the earnings series measures changes in pay rather than a market price.
Gold in the aftermath period
From January 2021 to August 2026, gold futures rose 143 per cent. Over the same period, the S&P 500 increased 107 per cent and consumer prices rose 27 per cent. Gold’s increase was the largest of the asset rows for this window, reversing its position against the S&P 500 in the earlier episodes.
The Fed’s total assets fell 8 per cent, in contrast with the increases reported for the earlier episodes. M2 nevertheless increased 20 per cent during the same period. These different movements show that a contracting Fed balance sheet did not mean every monetary measure was declining.
The Case-Shiller house-price index rose 42 per cent, and hourly earnings for production workers increased 29 per cent. The paper also reports increases of 29 per cent for food prices and 30 per cent for rent during the aftermath. Both exceeded the 27 per cent overall rise in consumer prices. Rent is part of the consumer-price measures, whereas the Case-Shiller index follows changes in house prices, so the two series describe different costs.
Felix Nikolas Prehn interprets the rise in consumer prices during this window as a delayed effect of earlier monetary expansion. The paper’s figures also show that gold increased while the Fed’s balance sheet contracted.
The data behind the gold comparisons
The paper uses COMEX front-month gold futures rather than spot gold. The gold and S&P 500 series are monthly closes from Yahoo Finance, as identified in the report. Their percentage changes describe movements in a quoted market series.
The four periods differ in length and some overlap. Their percentages are cumulative, not annualised; a 20 per cent increase across a window is not a 20 per cent yearly rise. Because the dates overlap, the four gold figures cannot be added together.
The Fed’s total assets, M2, consumer prices, hourly earnings and house prices are drawn from series in the St Louis Fed’s FRED database. Fed total assets are measured at the nearest weekly observation to the cited month, whereas the market series use monthly closes. Comparisons labelled for the same months therefore need not refer to identical observation dates.
The reported percentages are the author’s calculations from the underlying series. The report separates official economic data from market observations rather than presenting the latter as official statistical releases. It also acknowledges that fiscal transfers and supply disruptions affected pandemic-era inflation, so the episode figures do not isolate the effect of monetary policy.
Gold as a special case
In the paper, gold sits with shares and housing among the assets most sensitive to discount rates and portfolio rebalancing, the group that recorded the largest increases over the long period studied. The paper treats gold as a special case because it generates no cash flow, unlike the earnings or rent associated with shares and property.
In the paper’s longer-run table, gold futures rose 1,351 per cent from August 2000 to September 2026. The S&P 500 rose 438 per cent from January 2000 to September 2026, a different starting date. The September 2026 figures cover a partial month.
The same table lists a 96 per cent increase in consumer prices through August 2026 and a 237 per cent rise in house prices through June 2026. Those end dates differ from the September observation for gold and the S&P 500, so the figures provide longer-run context rather than directly matched comparisons.
About Felix Nikolas Prehn
Felix Nikolas Prehn, also known as Nikolas Prehn, is an economist and former investment banker, born in Germany. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. He is also a painter and sculptor and a public advocate for animal rescue.
About The Prehn Institute
The Prehn Institute is an independent research institution founded by Felix Nikolas Prehn. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. It publishes research on the financial markets and provides instruction in professional market practice.
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