Gold(GLD) Price Forecast Is More Than $2,500

What is the fair price of gold? Gold Price Predictions And Forecast Is More Than $2,500?

Traditionally, gold is one of the investors' favorite investment tools, and gold is also an essential asset when a bear market coming.

Through the following simple model of gold, it has certain reference significance for the reasonable price of gold at different times.

The following two methods to calculate the reasonable price of gold? The pricing method of gold is to calculate the moment when the market needs to reprice gold.

For example, during the financial crisis, the price of gold at that time and the money supply at that time were compared with the current money supply to calculate the current reasonable price of gold.

method one:

In 2008, when the gold price was 880 US dollars, the M2 money supply at that time was 7800 billion.

The current M2 money supply is 18,000 billion, so it is inferred that the current gold price should be 2030 US dollars.

United States Money Supply M2

If it is provided in M1 currency, the money supply at that time is 1600 billion, and the current M1 money supply is 5600 billion, then it is inferred that the current gold price should be 2660 US dollars.

Method Two:

Using the value-added calculation of the US balance sheet, the expansion rate of the assets of the balance sheet, if the US assets doubled, then gold should double.

The gold price calculation formula

However, if through this printing of money, the GDP of the US economy is inflated, it must be calculated by adding the US GDP.

United States GDP

In 2008, the GDP at that time was 14,712 billion, and now the latest GDP is 21,427 billion. By increasing currency issuance, it has indeed driven 44% growth in the US economy.

United States Central Bank Balance Sheet

Calculated from the US balance sheet, if the US balance sheet rises by 50%, gold rises by 50%. At the same time, it will be deducted GDP growth in the United States.

Because the increase in the balance sheet is logically proportional to the gold day, so it is a number. The growth of US GDP is logically inversely proportional to gold, so it is a divisor.

Taking 2011 as an example, gold has maintained a rise for several years. From 2008 to 2011, the balance sheet of the United States expanded by 143%, and the gold and gold theory rose by 143%. But GDP also rose by 5.6%.

The reasonable price of gold in 2011 was US$2025. As a result, his highest price was US$1920, almost US$2,000.

So how do you explain that after the gold price fell, $2,000 fell to $1,000?

Because the Fed stopped QE at that time and even reduced its balance sheet. Looking at the balance sheet, the Fed began to shrink its balance sheet in 2014.

This resulted in a 16% reduction in the balance sheet.

At the same time, GDP has expanded by 17%. These two factors are not good for gold at the same time.

It was calculated that the fair price of gold at that time was 1076 US dollars.

Then the forecasted price of gold in 2020 is based on historical data to calculate the reasonable price of gold.

Calculating with data from 2011, in 2019, the balance sheet expanded by 142%, GDP grew by 36%, and the fair price of gold was US$2,770.

Calculating with 2018 data, when gold goes to the lowest level but 1160 US dollars, the balance sheet grows by 155%. If GDP grows 0%, the reasonable price of gold is 2958 US dollars.

Gold price chart

What is the reasonable price of gold? There are traces to be found. Calculating the fair price of gold through years of data proves that the price of gold should be more than $2,500.

Related articles

April 04, 2020: The US stock market plummeted. Why did gold and crude oil plunge and lose their value?

Comments

ARKK VS ARKW, ARKQ, ARKG, ARKF, How to choose ARK Innovation ETF?

Which ARK Innovation ETF is best? Let’s perform an Ark ETF review. Today, I will introduce to you the five actively managed ETFs in ARK INNOVATION. Let’s take a look at which types of companies they have invested in so that you can choose the industry you like to invest in. ARK INNOVATION was founded by Catherine Wood. This investment company is a revolutionary and innovative company that specializes in investment. Their company currently manages seven different types of ETFs, five of which are actively managed ETFs, and the other two One is an exponential passive ETF, Simply put, the biggest difference between these two ETFs is that for actively managed ETFs, they will frequently trade the company stocks in the fund, so the proportion of the company he holds will always change, while the index-type ETF is as they think. After purchasing the company, you will not be able to move it again. It is very similar to S&P500 or QQQ, except that the holding company is different. Then let...

Bear market coming, gold(GLD) assets become essential

The economic data of the global economic powers have been deteriorating, entering the bear market stage of the economy, and people have become more cautious when choosing asset investment. We should choose investment products with a low correlation coefficient with economic performance and investment products suitable for the current economic cycle. Investors should pay more attention to foreign exchange and commodity markets so that they can add value to your assets. Among many assets, anti-inflation commodities such as gold have become essential assets. Take gold as an example. For many years, gold has been regarded as an anti-inflation commodity by international capital markets and has been regarded as an important asset hedging tool by investors. There is also a saying, "The world bought gold during turbulent times." From basic political theory, we know that gold is not currency, and the currency is naturally gold and silver. Although gold has withdrawn from ...

Investors have begun to switch back to traditional growth stocks

On Thursday, the stock prices of Cisco, Alphabet, and IBM hit new highs. But more importantly, the previously unpopular speculative growth stocks, including stocks bought by many ARK funds, have now begun to rebound. How is this going? Investors' perspective on the market is changing. In the first quarter of this year, mainstream voices in the market believe that the economy will restart strongly, bond yields will rise, and inflation may become a problem later this year. After the end of the first quarter, these expectations were only partially fulfilled. The U.S. economy has indeed restarted strongly, but bond yields fell in the first quarter instead of rising because investors began to believe: 1) Inflation and supply chain disruption may indeed be "temporary", as the Fed insists; 2) The second and third quarters will be the highest points of stock returns and economic growth. Alec Young, a chief investment officer of Tactical Alpha, said: “...

What is the essence of the stock market?

If you have invested in stocks for many years, and you already know what stocks are. But if I tell you, even if you have invested in stocks for many years, even if you are still losing money, you may have misunderstood what stocks are. Many people think that buying stocks is investing in a company and becoming a company shareholder. As long as the company makes money, the stock price will rise. As a shareholder, you can share the economic achievements of the company’s development, such as obtaining dividends from the company, such as the appreciation of existing capital, is it not good to return cash flow every year? If you think so and are willing to keep close to the company's stock if you wait for 5 years, 10 years, 20 years, then this idea may be correct, I will not stop you. But if you buy stocks just to make money, then I can tell you that the idea just now may be wrong. And this idea may cause you to often lose a lot of money, do you want to know why? First, if you a...

7 great investors' operating strategies to deal with the stock!

No one can be 100% sure about the outlook for the US stock market. Instead of entangled in whether the bull market in US stocks will end, it is better to think about what lessons can be learned from this plunge. Historically, due to the end of the summer market in September, U.S. stocks did not perform well. The plunge on Thursday sounded like a wake-up call for investors earlier. Be careful next week. Although Nasdaq is tolerant of faults The rate is high, but the up-and-down shock pattern has not changed, and there needs to be an established process. Investing in stocks should take a long-term view, have a long-term investment mentality, don't care too much about the rise and fall of one or two days, and don't feel unhappy because of the turmoil of the stock market, which affects the judgment of stock buying and selling. Today, let's take a look at how those familiar investment masters are invincible. The reason why masters become masters is that they have become masters ...

INTC stock forecast 2025: Intel's acquisition of SiFive

SiFive, a chip design start-up company based on the RISC-V instruction set architecture, has received an acquisition intention from investor Intel. A person familiar with the matter, who asked not to be named, said that Intel has offered to buy SiFive for more than $2 billion. RISC-V with x86 and Arm As we all know, Intel dominates the industry leader in x86 architecture chip technology, while SiFive focuses on open-source RISC-V technology and employs several founding members of the RISC-V architecture. For a long time, the field of CPU instruction set architecture has been dominated by x86 and Arm. Since RISC-V was born at the University of California, Berkeley in 2010, it has gradually formed a certain competitive landscape with Arm after more than ten years of development. With the gradual refinement of the application field, the model of one chip making the world has become a thing of the past. Facing the hot AI and Internet of Things market, RISC-V i...

The signal that the stock market has peaked?

the stock market Although I know how to judge when the bear market is over and when I should buy at the bottom, I still don't know how to judge the selling at the top. I'm afraid I don't know when to leave the market after buying stocks in the future. If you have also tried to avoid the crash, stock market crash, and even bear market, or always hold stocks at these times. These four tricks are based on my experience in the stock market for more than 10 years. They help me hold cash early before many market declines, so I suggest that you must see the end. It is likely to help you invest in stocks. Raise to another level. Because knowing how to go is more important than knowing how to buy, and knowing how to go is an important factor in determining how much you can earn or lose. The first trick, everyone needs to learn to identify the Distribution Day. As the name implies, the shipping day is a day of huge selling pressure. On that day, it may be that large account...

Alibaba stock price prediction 2025: BABA's PE is only 33 times?

Review Alibaba's digital economy has created a transaction volume of 1 trillion US dollars. The revenue and profit growth in the past few years have been solid, relative to Tencent (700), Pinduoduo (PDD), and JD.com (JD). 　　 Why is the valuation of Alibaba (BABA) relatively undervalued, PE is only 33 times? 　　 Is there a chance to catch up? 　　 Is Alibaba (BABA) an ideal investment? Compared with Tencent, Alibaba's business revenue sources are relatively concentrated, and most of them are related to online shopping. Although the company's business includes core business, cloud computing, digital media and entertainment, innovative business, and others, for 2020 earnings, cloud computing only accounts for 8% of total revenue, digital media, and entertainment 5%, and innovative business and others account for 1% of these revenues. Businesses that account for a fraction of the business are losing money. As for Alibaba's remaining 86% of its revenue, it is al...

50 Quotes On Investment About U.S. Stock market!

1. Odds priority vs probability priority: Small funds should have priority, and large funds should establish an operating system with probability first. Odds first means that small funds are going to look for opportunities like 1 to 5 and 1 to 10, so for small funds, luck is a very important factor. For large funds, you need to choose what happens with a high probability to ensure the safety of the principal. Of course, if the odds and probability opportunities coincide, then you should try your best to fight hard. 2. If Buffett is a person of this age, would he want to be an Internet celebrity? I think it will. Before Buffett became famous, he went to Carnegie's public speaking training class. You need someone to know your talents, otherwise, it's like blinking at the girl in the dark. 3. Today I saw a famous quote from Einstein, No problems can be solved from the same level of consciousness that created it. 4. Someone complained to Fisher that his method was too diffi...

FinanceLinkway

Search This Blog