Case for $45 Silver. Won't Mention The Gold Forecast Unless You're Sitting Down.
Jim Rickards $27,000 Gold. Luke Gromen $42,000 Gold. Graddhy $45 Silver
The Federal Reserve's ability to revalue gold prices operates through an accounting mechanism tied to the U.S. Treasury’s Gold Certificate Account (Section 2.10 of the Federal Reserve’s guidelines). This system allows the government to adjust the official price of gold on paper, creating liquidity without physically moving or selling gold reserves. Here’s how it works in practice:
When the Treasury decides to revalue gold—say, raising the official price from the long-fixed $42.22 per ounce to a higher market-aligned value—it triggers a chain of accounting entries. For example, revaluing the Treasury’s 260 million ounces of gold to $20,000 per ounce would generate approximately $5.2 trillion in theoretical value. The Federal Reserve then credits this amount to the Treasury General Account, effectively creating new funds for government use. This process relies entirely on double-entry bookkeeping, meaning no physical gold changes hands or leaves government vaults.
Historically, this mechanism has been used during crises. In 1934, President Franklin D. Roosevelt revalued gold from $20.67 to $35 per ounce, generating $2.8 billion (about 40% of GDP at the time) to fund New Deal programs. Today, analysts suggest a similar revaluation could help manage the U.S. debt-to-GDP ratio by creating trillions in accounting value to offset liabilities.
However, the Federal Reserve itself doesn’t own gold—it only holds gold certificates issued by the Treasury at the statutory rate of $42.22 per ounce. The authority to revalue rests solely with the Treasury, not the Fed. Critics argue this resembles a legal “accounting trick,” akin to proposals like minting a trillion-dollar platinum coin, and could risk inflation if overused. There’s also the challenge of global acceptance: a unilateral revaluation might destabilize currency markets unless coordinated with other central banks, many of which have similar gold revaluation frameworks.
While the system remains dormant in everyday policy, it highlights gold’s lingering role as a backstop in the modern financial system—a tool that could theoretically be activated during extraordinary fiscal or monetary stress.
Luke Gromen and Jim Rickards approach gold valuation through different analytical lenses, though both arrive at eye-popping theoretical price targets tied to U.S. fiscal and monetary conditions.
Jim Rickards explaining $27,000 per ounce Gold
Rickards grounds his $27,000-per-ounce estimate in historical gold backing ratios. He begins with the current M1 money supply—a measure of cash and liquid deposits totaling $17.9 trillion—and applies the 40% gold coverage rule the Federal Reserve maintained from 1913 to 1946. This calculation suggests the U.S. would need $7.2 trillion in gold-backed value to stabilize the dollar under such a system. With America’s 261.5 million troy ounces of reserves, this translates to roughly $27,500 per ounce. While he acknowledges extreme scenarios using broader money supplies like M2 (which could imply $50,000/oz), Rickards emphasizes the $27,000 figure as a pragmatic midpoint that balances historical precedent with modern financial realities.
Luke Gromen justification for $42,000 per ounce Gold
Gromen’s $42,000-per-ounce projection emerges from a broader macroeconomic narrative. He focuses on gold’s shrinking role relative to foreign-held U.S. debt—a ratio that plummeted from 40% of Treasury holdings in the 1970s to around 5% to 7% today.
Restoring this balance, he argues, would require tripling or quadrupling gold’s price. Gromen draws parallels to the 1970s dollar crisis, when gold spiked to 135% of Treasury holdings, suggesting a similar crisis today could propel prices to $42,000-$44,000.
His analysis extends to global reserve trends, noting that central banks have been dumping $400 billion in Treasuries since 2014 while buying gold at record rates—290 tons in early 2023 alone. This shift reflects what he calls a move toward “neutral reserve assets” as nations like BRICS countries reduce dollar dependency.
Luke Gromen (smarter than I am) also ties gold’s potential surge to energy markets, observing that oil-producing nations increasingly demand gold in trade settlements. Given oil markets dwarf physical gold markets by 12-15 times, even marginal shifts toward gold-backed oil transactions could create explosive price pressures. - Jon Forrest Little
Though their methods differ—Rickards’ formulaic approach versus Gromen’s systems-level analysis—both share a foundational concern about unsustainable U.S. debt levels and the dollar’s weakening global position.
They view gold not just as a commodity, but as a potential financial “reset button” that could address these structural vulnerabilities through price revaluation rather than physical market transactions.
whenever we read about these type of numbers such as 27,000 gold or 42,000 gold these are just analysts “spitballing” based on hypotheticals and we are not saying “bet the farm” Also note that if you used a gold to silver ratio of 60 to 1
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“Been saying the weekly cycle has bottomed and silver should now see $40-$45 next. And, silver is today breaking out on the daily chart, as posted. Said now for 11 weeks that 30.00 level and triple support there will most probably hold, on weekly closing basis. And it has.” - Graddhy Trading
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