Gold Bars Reach a Million-Dollar Milestone
Gold Bars Reach a Million-Dollar Milestone
Historic Price Surge
For the first time, the value of a single gold bar has surpassed one million dollars. This milestone was achieved when the spot price of gold exceeded $2,500 per troy ounce, marking a record high. Gold bars typically weigh around 400 ounces, which means each bar is now valued at over $1 million.
Market Dynamics
The London market, a primary hub for gold transactions, usually deals with bars containing between 350 to 430 ounces of pure gold, as noted by the London Bullion Market Association. Despite this, consumers can purchase smaller, more affordable gold bars from retailers like Costco.
Factors Driving the Price Increase
The surge in gold prices this year is attributed to several factors. Central banks worldwide have increased their gold acquisitions, purchasing a total of 483.3 tons in the first half of the year, equivalent to nearly 40,000 bars. Additionally, expectations of a more relaxed monetary policy from the US Federal Reserve have contributed to the rising demand and price of gold.
Implications for Investors
This historic increase in gold prices highlights the ongoing demand for precious metals as a hedge against economic uncertainty. Investors may find gold an attractive option given its current valuation and the potential for continued price growth
Jim Rickards sets $27,000 per Ounce Gold Target
Jim Rickards arrives at his prediction of $27,000 per ounce for gold through a detailed analysis based on the potential return to a gold standard.
His calculation involves the U.S. M1 money supply and a historical gold backing ratio. Rickards assumes a scenario where central banks might be forced to revert to a gold-backed system due to a collapse in confidence in fiat currencies, driven by excessive money creation, competition from cryptocurrencies, or a financial crisis.
Rickards uses the U.S. M1 money supply, which is approximately $17.9 trillion, as the basis for his calculation. He applies a 40% gold backing ratio, a standard historically used by the Federal Reserve. This implies that $7.2 trillion worth of gold would be needed to back the money supply. Given that the U.S. holds 261.5 million troy ounces of gold, Rickards calculates the price of gold as follows:
This price reflects a significant increase from current levels and is based on the assumption that such a monetary system could be implemented. Rickards emphasizes that this is not merely speculative but a result of rigorous analysis, considering historical precedents and current economic indicators.
He also discusses the implications for investors, advising them to invest in gold now to capitalize on potential future gains.
Rickards highlights the importance of gold as a hedge against inflation and economic uncertainty, suggesting that physical gold, gold stocks, or gold IRAs could be strategic investments
Gold at $60,000 per Ounce is Plausible, Possible and Also in Play.
History teaches us
If we were to have a repeat of the 1970s
Moon Shot gold by 24 X
$2,500 x 24 Equals?
That would price Gold at $60,000.
Gold today backs the dollar by only 9% marked to market.
In 1971, it was 12%.
Meaning, gold is lower now than it was in 1971 by this metric.
Price Implications for Silver
Recommendation
Convert Federal Reserve Paper Notes into Real Gold and Silver
Use the #1 Trusted Name in Precious Metals
Afterthought and Unfortunate Riddle of the Day
