Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20
Gold Gann Angle Update - 10th Jan 20
Gold In Rally Mode Suggests Commitment of Traders (COT) Data - 10th Jan 20
Disney Could Mount Its Biggest Rally in 2020 - 10th Jan 20
How on Earth Can Gold Decline During the U.S. – Iran Crisis? - 10th Jan 20
Getting Your HR Budget in Line - 10th Jan 20
The Fed Protects Gamblers at the Expense of the Economy - 9th Jan 20
Last Chance to Get Microsoft Windows 10 for FREE! - 9th Jan 20
The Stock Market is the Opiate of the Masses - 9th Jan 20
Is The Energy Sector Setting Up Another Great Entry? - 9th Jan 20
The Fed Is Creating a Monster Bubble - 9th Jan 20
If History Repeats, Video Game Stocks Could Soar 600%+ - 9th Jan 20
What to Know Before Buying a Land Rover Discovery Sport in 2020 - 8th Jan 20
Stock Market Forecast 2020 Trend Analysis - 8th Jan 20
Gold Price at Resistance - 8th Jan 20
The Fed Has Quietly Started QE4 - 8th Jan 20
NASDAQ Set to Fall 1000pts Early 2020, and What it Means for Gold Price - 8th Jan 20
Gold 2020 - Financial Analysts and Major Financial Institutions Outlook - 8th Jan 20
Stock Market Trend Review - 8th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Well Below Inflation Adjusted 1980 High in Deutsche Mark

Commodities / Gold and Silver 2010 Nov 25, 2010 - 05:02 PM GMT

By: GoldCore

Commodities Best Financial Markets Analysis ArticleGold has remained firm despite an increase in risk appetite as seen in the bounce in equity markets in Asia and Europe so far this morning. While Korean concerns have abated for now, eurozone "peripheral" debt is under pressure again pushing spreads with bunds to, or in some cases close to, euro-era highs. The 10-year benchmark bond of Ireland is now up 6 basis points at 8.72%, while Portugal and Spain are up 7bp to 6.87% and up 11bp to 5.14%, respectively. This has seen gold remain firm in major currencies and remain near nominal highs in euros.


Gold is currently trading at $1,372.63/oz, €1,028.80/oz and £870.79/oz.


Gold in Euros (Deutsche Mark converted) in Nominal Terms and Not Adjusted for Inflation

The Thanksgiving holiday in the US is seeing light trading in commodity markets but oil has crept over $84 a barrel after its 3% rise yesterday. The selloff in German bunds and US Treasurys and 10 year bonds yesterday might be an early warning that investors are concerned that contagion in eurozone periphery debt could gradually lead to higher rates in less risky bonds.

Should the euro fall below the technical level of 1.33 to the dollar then it could quickly fall to 1.30 and this would see gold priced in euros rise to new record nominal highs over €1,050/oz.

When adjusted for inflation, the record high price of gold in 1980 in Deutsche mark (converted to euros) was over €1,800/oz (see chart above). Thus, gold remains nearly half of its price in 1980 when adjusted for inflation in many currencies which should give those calling gold a bubble pause for thought.

Rather than gold rising in price, what is actually happening is that the world’s major currencies are being devalued through unprecedentedly loose monetary and fiscal policies which is seeing paper currencies fall in value versus the finite currency that is gold.

This process looks set to continue for the foreseeable future. Until politicians in the US and other major industrial nations are able to withdraw stimulus spending and restrain public spending, as Ireland has been doing to its cost, gold will likely remain in a bull market. Until central bankers raise interest rates to more normal levels at least above 5%, paper currencies will continue to depreciate.

Unlike property, equities and most asset classes (even oil) which have risen to multiples of their previous record nominal highs , gold remains nearly half the price it was in 1980 in dollars and other major currencies ($2,300/oz) when adjusted for inflation.

In January 1980, gold became a bubble after rising by nearly 100% in 1979 alone and a massive 2,400% in dollar terms and by more than 700% in Deutsche mark terms – one of the strongest paper currencies in the world during the 1970s.

We are beginning to realize the euro is a far more risky currency and may not even survive the current crisis and therefore gold’s performance in Deutsche mark terms in the 1970s is likely to be repeated and surpassed. A 700% increase would see gold in euro terms rise from €250/oz in 2000 to some €2,000/oz in the coming years.

Given the scale of the current crisis and the fact that the UK and US fiscal positions are worse than they were in the 1970s, gold’s bull market looks on a sound footing.

As ever, the future movement of all asset classes is unknown and real diversification remains of fundamental importance.

SILVER
Silver is currently trading $27.45/oz, €20.57/oz and £17.41/oz respectively.

PLATINUM GROUP METALS
Platinum is currently trading at $1,654.50/oz, palladium at $695.00/oz and rhodium at $2,300/oz.

This update can be found on the GoldCore blog here.

Mark O'Byrne
Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

144jr144
03 Oct 12, 12:48
gold is way down in adjusted dollars, nominal yen, etc

In the link below, I show charts adjusting the US Dollar price of gold as well as nominal prices in Yen (which are down from 1980 as well). http://jrfibonacci.wordpress.com/2012/10/03/the-golden-myth/


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules