The Approximity Gold Price Model is based on the MZM (money with zero maturity; read more) money supply measure as provided by the U.S. Federal Reserve and the U.S. Federal Gold Reserves.

The rationale of the model is fairly simple. MZM, i.e. financial assets redeemable at par on demand, is what the Federal Reserve system has to underwrite in the case of a banking crisis to avoid panics. If the central bank fails to underwrite sufficiently large parts (potentially all) of MZM, a panic might ensue where money could be withdrawn in such large amounts that it could become systemically dangerous. The Fed therefore has no choice: it has to underwrite MZM.