Evaluating The “#Gold Rally”: How Long To Get To $10,000/oz? – Jeff Nielson | Sprott Money
Excellent gold market analysis by Jeff Nielsen at Bullion Bulls Canada!
September 14, 2016
There’s a “rally” in the gold market right now, and (to a lesser extent) in silver. We’re told this by the mainstream media – in between its salvos of gold-bashing. Sadly, we have also seen this parroted by numerous Alternative Media commentators. So let’s examine this “rally” yet again.
The rally started almost precisely on the first day of the year (nothing suspicious about that). In the 8 ½ months since then, the price of gold has risen by roughly $250, or a little below $30/month. For convenience, let’s say that the price has been advancing by about $1 per day.
For the sake of argument, let’s pretend that this is a real rally, and see how long it would take to reach any rational price targets. Let’s start with a big target: a fair and rational price for gold – today . A previous commentary pegged that fair price at $10,000/oz, calculated in relation to a fair price for silver, today: $1,000/oz. The 10:1 price ratio between the two metals (rather than the historic ratio of 15:1) is based upon the fact that most of the world’s silver stockpiles have been literally consumed, thus the supply ratio between gold and silver has not been this low in at least 500 years.
Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.
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