Meanwhile I'm trying to think about what will be a fair price for gold under current conditions, one of the main issues regarding the price of gold is the fact that the gold market is both a physical and paper market and this fact is a very important one.
click on the chart below to enlarge
3 comments:
These 2 articles by Paul van Eeden do seem to provide a framework for establising gold's market price.
1. The Market Price for Gold (2 March 2004)
http://www.gold-eagle.com/editorials_04/vaneeden030204pv.html
2. Gold's Theoretical Value (16 March 2004)
http://www.gold-eagle.com/editorials_04/vaneeden031604pv.html
In essence, he stated: "An increase in the amount of dollars (dollar inflation) reduces the dollar’s value and hence prices rise. Similarly, an increase in the amount of gold in the world reduces the value of gold and causes the gold price to decline. If we knew what the increase in US money supply was from 1933 to present, and we knew how much gold had been produced since then, we could theoretically calculate what the gold price should be at any point in time."
Thanks for pointing me to your site.
Teresa Lo
Anonymous, Im working on an article regarding those issues, thanks for the links.
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