James Rickards, geopolitical and monetary expert and best selling author of the ‘The New Case for Gold’ considered today ‘the case against gold’ in best selling UK financial publication Money Week.
Rickards debunks the most commonly held arguments against gold including that gold does not have a yield, there is not being enough gold to support the monetary and financial system and that gold “cannot support the growth of world trade and commerce because it doesn’t grow fast enough.”
Rickards begins his article by recapping gold’s recent price history and why it appears undervalued now:
… I want to take a look at the case against gold. Starting from a low of about $250 per ounce in mid-1999, gold staged a spectacular rally of over 600%, to about $1,900 per ounce, by August 2011. Unfortunately, that rally looked increasingly unstable towards the end.
Gold was about $1,400 per ounce as late as January 2011. Almost $500 per ounce of the overall rally occurred in just the last seven months before the peak. That kind of hyperbolic growth is almost always unsustainable.
Sure enough, gold fell sharply from that peak to below $1,100 per ounce by July 2015. It still shows a gain of about 350% over 15 years. But gold’s lost nearly 40% over the past four years. Those who invested during the 2011 rally are underwater, and many have given up on gold in disgust. For long-time observers of gold markets, sentiment has been the worst they’ve ever seen.
Yet it’s in times of extreme bearish sentiment that outstanding investments can be found – if you know how and where to look.
There’s already been a change in the winds for gold so far this year.
James Rickards said recently that gold has the “chart of the decade” and made a strong case, based on ‘maths’ and on gold’s small above ground supplies and meager annual production versus surging money supply growth, why he believes gold will rise to $10,000 per ounce. Read More…