The increase in the prices of goods caused by the increases in the money supply. In connection with this underlying cause, you can also hear terms such as wage inflation and cost inflation. The former looks at the wage component as an inflationary driver, while the latter posits that inflation relates to the increased cost side.
Inflation and Gold
Gold is known to be inflation hedge and this reputation is well-earned. Since inflation means the decrease in the value of fiat (paper, unbacked by metals) money, people turn to assets that proved to be money throughout history - gold & silver. Platinum used to be money as well, but it's not as recognizable as silver and gold, so the reputation of the ultimate inflation-hedge goes to the former metals, gold in particular (silver being somewhat industrial metal nowadays).
Consequently, we can observe high positive correlation between inflation and gold price. Please take a look at the chart below to see how closely two values are tied.
As you may see on the above gold and inflation chart, when inflation rises, gold rallies. As we have mentioned earlier, inflation is the increase in prices of goods caused by the increases in the money supply, so analogous relationship should be visible also between gold and money supply.
Clearly, gold and money supply tend to move in the same direction.
At this point you may wonder whether gold moves up more than prices of other goods. Naturally, that is the case - otherwise, gold would not be an inflation hedge. However, gold price doesn't really outperform prices of other assets at the first stage of the bull market. The first stage of the bull market is also known as the "hidden stage" because it's visible primarily from the USD perspective. In other words gold priced in other currencies moves back and forth, without any long-term uptrend. The second stage of the bull market is where gold fueled by inflation truly starts outperforming prices of most assets and it's rally is visible also from non-USD perspectives. In this bull market, the second stage begun in 2006.
Inflation and Silver
Similarly to gold, silver price also rises in an inflationary environment. Please take a look at the chart below for details.
Gold Inflation Adjusted
Taking inflation out of the gold price fluctuations allows us to see if gold is indeed in an uptrend. After all, if an asset (like stocks) are not keeping up with inflation, investors holding it will really lose money. This perspective also allows us to see if the bull market is truly in place.
As you may see, inflation-adjusted gold price is in a clear uptrend. The additional fact that we can observe on the above chart, is that gold is still far from its 1980 high, which suggests that gold has more room to go before the bull market is over.
Silver Inflation Adjusted
Taking inflation out of the silver price moves provides us with a proof of silver's uptrend.
Naturally, inflation-adjusted silver price is in a clear uptrend. While silver has already reached its 1980 high in nominal terms, it's far from reaching it in real terms. The implication is that the bull market in silver may have much more room to go, as the fundamental situation for silver is much more positive this time.