Ratio of Gold/CRB Spot Commodity Index, Log Scale. Compared to a broad basket of commodities, Gold is more "expensive" today than it was at the 1980 peak, yet I keeping hearing how cheap gold is. If Gold is cheap then all the other commodities must be dirt cheap.
I am not an expert, but I believe the correct answer is above. Price always 'is'. "Should' is a very bad word in this environment.
The correct answer is $647 Agreed But this enviroment = speculative bubble betting on future hyperinflation (or some kind catastrophe where you want to hold physical gold). I am not shorting gold. Like someone said earlier, recognizing a bubble doesn't give you an edge in trading it.
You are right. Gold is a commodity. There isn't really any intrinsic value other than price which is based on supply and demand. Is the supply of gold increasing? Is the demand shrinking? Is there any substitute investment? Is there any urgency to buy this commodity? Those are the questions for which the answers are reflected in price.
Just pointing out the fallacy that gold is rising to keep up with inflation. Or that gold is cheap relative to inflation.
Couldn't agree more, it's all a bunch of non-sense. Doesn't mean gold can't go to $50,000, but let's skip the fundamental rationalization.