As mentioned in previous Analysis articles on the GoldMoney website, there are a variety of metrics one can look at in seeking an answer to this question. Gold ownership as a percentage of institutional investors’ portfolios; US gold reserves versus US money supply; the historic gold price adjusted for inflation – all of these are useful tools in deciding whether or not gold is undervalued.
Along with the Fear Index (an equation for comparing the US money supply with the value of official US gold reserves), James’s latest King World News piece introduces us to “The Gold Money Index”:
Central Bank Foreign Exchange Reserves/Central Bank Gold Reserves = Fair Price of Gold
Using this valuation tool yields a “fair” gold price target of over $11,000 per ounce. Who says it’s too late to buy gold? Be sure to read the full article at the KWN Blog for James’s full analysis.