Thursday , 21 September 2017


Gold

Buffett’s Favorite Indicator Implies A 20.6% Annual Increase in Gold Over the Next 10 Years

buffett

The ratio of total stock market capitalization to GDP, a favored indicator of the “Oracle of Omaha”, has historically proven to be a very useful and reliable harbinger of longer-term future returns in equities in the U.S. - and it suggests annualized total returns of -1.27% on the S&P over the next 10 years. Lower equity returns over a 10-year period have been clearly consistent with higher returns for gold. In fact, every 1% drop in annualized total returns on the S&P 500 implies a 1.5% increase in returns on gold. That would be consistent with returns for gold of around 20.6% on average per year.

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What Should the New Normal Be For the Gold:Silver Ratio?

fine silver fine gold

Why do some analysts argue that the gold:silver ratio should reflect the relative rarities of the two metals in the ground and therefore be 10:1 or lower? I don’t know, but it isn’t a valid argument. Neither is the argument that the gold:silver ratio should be around 16:1 because that’s what it averaged for hundreds of years prior to the last hundred years. So, what should it be?

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Gold: A Picture Of Fear!

investor-fear

The SPDR Gold Trust (NYSE: GLD) added 11.84 metric tons of gold on April 19. That’s the most since Sept. 6, 2016, and it brought the GLD’s holding to 860.76 metric tons. That’s 27,674,076 troy ounces. What’s driving this? Fear.

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