Haymaker Daily

On where gold might be headed

Hello, Subscribers:

Before you start believing any eulogies for the latest gold bull market, it might be wise to compare its duration and magnitude to that of earlier price eruptions going back to the 1970s. As you can see, the current iteration has much further to go, like 550%, to match the upside explosion that happened in the Disco decade. Even the run which started in 2001 and continued into 2008, suggests another 100% is possible.

RBC

On the topic of gold’s potential additional upside, in a recent podcast on David Lin’s popular YouTube channel, Professor Steve Hanke opined that it may be able to rise another 50%. He based this on the fact that, according to his research, past gold up-cycles have continued until the price reaches the equivalent of 10% of disposable personal income. Per his calculations, that equates to around $6,000.

More aggressive upside objectives are based on the thesis that the U.S. government plans to eventually collateralize large swaths of the U.S. Treasury market with bullion. To facilitate this, a far higher gold price is needed, based on this logic, perhaps around $10,000.

Yet, even if bullion should ultimately reach that level, there will undoubtedly be periodic wind shears. Those will almost certainly be much more severe for the gold miners, creating opportunities for disciplined and opportunistic investors.

David “The Haymaker” Hay

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