zaterdag 31 december 2011

Gold Money Index (James Turk)

There is this Gold Money Index that gives the fair price of gold. (James Turk)

                                   Central bank foreign exchange reserves (USD)
Gold Money Index =    ----------------------------------------------------------------------
                                        Central Bank Gold Reserves (ounces)

I quickly took some numbers from Wikipedia for foreign exchange reserves:

 China 3197 billion USD
 Japan 1137 billion USD
 Eurozone 886 billion USD
 Russia 510 billion USD
 Saudi Arabia 456 billion USD
...

Total ~ 12000 billion USD


Then I quickly took some numbers from Wikipedia for gold reserves in central banks:

 USA 8133 tonnes
 Germany 3401 tonnes
 Italy 2452 tonnes
 France 2435 tonnes
 China 1054 tonnes
 Switzerland 1040 tonnes
 India 946 tonnes
 Russia 836 tonnes
...

Total ~ 1000 million ounces of gold


Gold Money Index = 12000 billion USD / 1000 million ounces = 12000 USD/ounce


So basically we have a gold price of 1500 USD/ounce today and are supposed to have a fair price of 12000 USD/ounce of gold. That's an eightfold increase in the gold price. If what James Turk says is a good valuation of gold, then we're in for a big ride upwards.

To learn more about the Gold Money Index, please go to:
Gold Money Index

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