GOLD PRICE AND GEOPOLITICAL CONCERNS
Investors and others often use the term geopolitical to describe investment risk arising from various conflicts between individual countries and, also, among nations in general on a worldwide basis.
Gold
Gold Continues 3-Year Decline
GOLD CONTINUES DECLINE
Gold continued its downward path this past week and all but confirmed that lower prices are ahead. Below is a chart of price action dating back to the peak in 2020…
Gold Prices (inflation-adjusted) 2020-23
Is Silver Underpriced Compared To Gold?
SILVER NOT UNDERPRICED
Silver bulls have for decades made the argument that the white metal is underpriced relative to gold. Their enthusiasm is fueled by expectations for a return to the original fixed ratio of 16:1 in favor of gold.
Using the current gold price of $1925 oz., a return to the ratio of 16:1 would require a silver price of $120 oz. – right now.
Gold – After Inflation, What Is Left?
GOLD AFTER INFLATION
The closing price for spot gold in New York today is $1915. Forty-three years ago, in May 1980, gold was priced at $515.
Being somewhat generous, and since gold has been higher (above $2000) recently, we might say that the gold price has quadrupled over those forty-three years.
Gold And The Shrinking Money Supply
GOLD AND THE MONEY SUPPLY
A recent article (Credit Crunch: The Money Supply Has Shrunk For Eight Months In A Row) by Ryan McMaken of the Mises Institute explained clearly the historical significance of the contraction in the money supply that has occurred over the past eight months.
In this article, I will be talking about the possible effects of this ongoing contraction as they relate to the price of gold.
Gold Convertibility – NOT Gold Backing
GOLD CONVERTIBILITY IS THE KEY
All the talk about BRICS countries possible issuance (not anytime soon) of a gold-backed currency, and most of the analysis, misses a key point.
The success of any fiat currency or real money substitute (in other words, anything other than gold itself as the medium of exchange) depends on its convertibility into gold – on demand.
Gold Is LITERALLY Priceless
GOLD IS PRICELESS
Over 5000 years of recorded history, gold has proven itself to be real money. Gold’s value is in its use as money. That value is unquestioned.
Whatever arguments are put forth against gold’s use as money are attempts by government to free itself from the restrictions that gold imposes. Gold, when used properly, limits the ability of government to inflate and debase its money.
The Price Of Gold Is Irrelevant (AUDIO)
PRICE OF GOLD IS NOT ABOUT GOLD
Attempts to analyze and value gold are superfluous. Gold’s value – its use as money – has already been established. That value is constant and unquestioned.
The price of gold does not tell us anything about gold or its value. The gold price tells us only how much purchasing power the U.S. dollar has lost – nothing else.
Gold At $4000 – What Will It Take?
GOLD AT $4000?
For that to happen will require something almost unbelievable – if you expect gold to be at $4000 anytime soon, that is. The problem with most predictions for higher gold prices is that they fail to account for the financial and economic turmoil that would accompany those higher prices.
What is so unbelievable that would need to happen for gold to go to $4000 oz.?
The Prostitution Of Gold
PAYMENT FOR SERVICES RENDERED
The gold market has become a social gathering place for an odd combination of participants. Those participants range from the gullible and the disillusioned to those seeking the next big thing.
Permeating the atmosphere surrounding the commotion are false fundamentals and faulty logic. Fundamental analysis, or what passes for it, gets distorted and perverted beyond recognition.