Gold: Is $1,000 an Ounce in the Offing?
Source: Seeking Alpha††(10/9/07)
John Hathaway, Senior Managing Director and Portfolio Manager of Tocqueville Asset Management, from a recent interview with Barron's online: "..."I donít think it will take much to get us to $1,000 an ounce. Letís not forget, in 1980 dollars, gold is less than half of its nominal price today."
Here are some excerpts from the interview:...
What gets us to the magic number of a $1,000 an ounce?
I donít think it will take much. Letís not forget, in 1980 dollars, gold is less than half of its nominal price today.
The disparity between the amount of paper that has been created since 1980 and the amount of gold that has been produced since then is just enormous. The ratio of financial assets to physical gold is at the low end of a historical range. If you were to mark all the gold to market that has ever been mined, which is a very conservative approach, and then take the valuation of all the global stock markets and all the global bond markets, gold represents about 3%, compared with a figure in the mid-20% range in 1980, which was the top of the bull market in gold and the beginning of the bull market in financial assets.