Wednesday , 23 August 2017


Continued Growth In U.S. Public Debt Suggests $2,000 Gold – Here’s Why

The price of gold, on a quarterly basis, is 86% correlated – yes, 86%! – to totalgolden-dollar1 government debt going back to 1975… and a shocking 98% over the past 15 years – as can be clearly seen in the chart below. Despite the current rumblings, everyone is aware that the debt ceiling will be raised and will likely surpass $20 trillion by the end of President Obama’s term. That would put the price of gold at about $2,000 per ounce.

This post was featured on bmgbullion.com under the title Chart of the Week: Correlation Between Price of Gold and US Public Debt.

[The post is presented by  Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample hereregister here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Also read: Startling Relationship Between Gold Price & U.S. Gov’t Debt Suggests What Price for Gold in 2017?

[Editor’s Note: What has been the case since 1975 does not seem to hold true any longer, however, given the chart below showing that the correlation no longer applies:

Source]

[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]

*http://www.bmgbullion.com/document/buzz/2013-10-02 (© Copyright 2003-2012 Bullion Management Group Inc.  All rights reserved. Buy BMG Gold, Silver and Platinum  >> To Learn More About BMG Bullion Products)

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4. Startling Relationship Between Gold Price & U.S. Gov’t Debt Suggests What Price for Gold in 2017?

The price of gold, on a quarterly basis, is 86% correlated – yes, 86%! – to total government debt going back to 1975… and a shocking 98% over the past 15 years! [As such,] it would seem like a no-brainer investment thesis to buy gold… as a proxy for the not-otherwise-investable thesis that US total government debt will increase in the future. [But there is more – and it is disappointment for gold bugs – read on!] Read More »

 

 

2 comments

  1. My prediction is that Gold will hit $2,000 an ounce before the middle of 2014, then jump to $3,000 an ounce in less than a year later; get ready for all PM’s to leap upward, while the Central Banks all “reboot”…

  2. I hear some are saying a $2000 an oz price point could be conservative long term, but who really knows on the short term? Will there be another correction down to $1250 or will the price surge forward in the coming weeks. I can’t call it.