Attempting to value gold
I found an interesting set of videos by the founder of Bullionvault, trying to put a fair value on gold.
It is a very tricky business, but I think he did a decent job navigating through it and he came up with a fair value around 3800$.
He uses probability of inflation % in baskets and tries to filter the probability of that really happening into the price of gold.
Another way to look at it may be using the Dow/gold ratio:
At 13,000 for Dow, then the price of gold to match a long-term ratio of 3 would be around $4000 an ounce.
I was wondering if you had any thoughts on this analysis?
BullionVault is great but I think this is quite conservative a figure, even considering the article is over a year old when gold was around the $1,300 level if I remember right). And Peter Schiff and others have pointed out that the gold to Dow ratio would eventually get to nearer the 1:1 level before a correction does take place. Whether this means a Dow declining from 13,000 or whether gold and the Dow will meet somewhere beyond 13,000 is the mystery. I’d say above 13,000, but I might be thinking wishfully.
Hi i am gold and silver trader and new in this forum.
After more than two years of pursuing this issue with several highly specialized tax attorneys well-versed in this area (not associated with the company referenced below), I respectively disagree with you. The IRS regulations are not at all as straightforward as you depict above.