If that theory were to hold true, then the price of gold would go up/stay steady, but rarely go down. On the other hand, I cringe when the experts talk about how all those slave-labor communist goods flooding the country “keep inflation low.”
I disagree. Even though gold is always a relatively scarce commodity, the demand for it still fluctuates. Scarcity in and of itself is not enough to keep its price high.
Right now, demand for gold is high because of the expectation that the dollar will continue to drop in value. If that change and the dollar were to increase, some gold-holders would start to sell and the price would likely drop.