As we kickoff another trading week, look at this shocking price target for gold.
Staying Ahead Of The Coming Gold Mania
October 28 (King World News) – Email from King World News reader Kevin W: Trying to stay in front of the gold mania that is coming.
As of October 24, 2024, Global Financial Assets are at about $311 trillion, Private Gold Holdings $1.9 trillion and Global Mining Shares at $550 billion. Private gold holdings combined with mining shares as a percentage global financial assets of still only represent 0.8%. This is about the same as it did at end of July 2024 even with the appreciation in gold since then. Where do we go from here? We all know that this percentage reached 8% in January 1980 ending year 1980 at 5%. It would take an 80% correction in global financial assets with static gold price and mining shares to reach 5%. Or an outstanding 5X multiple (of the current gold price = $13,750) private gold worth $10 trillion and $5.5 trillion in mining shares with static equities to reach 5%. That is a 5x multiple in gold and a 10x multiple in global mining shares and global equities can just stand pat. However it plays out, gold will gain substantial purchasing power over other financial assets and mining shares should kick into high gear as soon as the wall of worry is gone.
The Setup Today
Gold – $2750
Global Financial Assets $311T
Global Private Gold Holdings $1.9T (21,500MT)
Global Central Bank and Treasury Gold $$3.5T (40,000MT)
Global Mining Shares $550B
What About The 1970s?
I found an old Stanford Study that shows just how undervalued mining shares are today especially with 59,000 metric tonnes of proven and probable gold reserves where the market value of these companies is less than 10% of the value of their reserves. In this document it did a study of gold and mining shares. It indicated that as of March 1973 when gold was about $100, global equities were worth 10x and US equities worth 6x what global private and central bank/treasury gold holdings were. By December 1974 when gold hit $200 the ratios were reduced to 5x for global equities and 3x for US equities. After which there was a 50% correction in gold back to $100 in 1976 before it made its $800 run by January 1980. Today at $2750 private and public gold holding amount to only $5.4T dwarfed by $138T of global equities or $58T in US equities. Consequently today global equities are 25.5X and US equities 10.7x the value of global private and public gold holdings. What you can see is just how expensive over all equities are globally and in US compared to gold value holdings private and public. Again, it would take an 80% correction in global equities with static gold price to reach that 5x ratio that it was in December 1974. Or an outstanding 5X multiple $13,750 gold with static equities to reach the December 1974 levels that preceded a 50% correction in gold price.
One can also see the bearishness of gold mining executives and analyst thereof in late 1973 with gold at about $100 as to their gold price projections. They were incorrect over next 12 months as gold nearly doubled.
From 1973 March to April 1974 gold rallied 92% and gold mining shares rallied 124% while S&P 500 declined 12%. Mining shares only advanced 35% more than gold in this period. Today year over year GDX mining shares on a whole have advance only 15% more than gold. Here we are again today with the wall of worry by gold mining executives and analyst regarding price and what Eric King calls the wall of terror with mining shares. But we are nowhere near the value of gold physical holdings private and public as a percentage of global or US equities that occurred before a 50% correction in gold occurred in 1975-1976. Conclusion – Do not get fancy and sell physicals or mining shares before the shit really hits the fan.
For What It’s Worth…
The CEO’s and analysts were as clueless back then in 1973 as they are today regarding gold prices moving forward. Even after almost doubling over 12 months to $180 into March ’73 they could not imagine what lie ahead. And that 50% decline that happened in gold price from Dec. 1974 into mid 1976, this time around will never happen until gold and mining shares are worth a lot more relative to equities and/or total financial assets.
Fortunes Will Be Made
Turk Says Fortunes Will Be Made In The Gold Market CLICK HERE.
Just Released!
To listen to James Turk discuss how fortunes will be made in this gold bull market CLICK HERE OR ON THE IMAGE BELOW.
Just Released!
To listen to Alasdair Macleod’s KWN audio interview that was just released CLICK HERE OR ON THE IMAGE BELOW.
© 2024 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged.
