- May 27, 2015
- Category: Gold
Current or prospective gold owners often focus on gold’s day-to-day price fluctuations and lose sight of the bigger picture. To gain perspective, it can be helpful to look at gold’s performance over a longer period of time or compare it to other data. Below we’ve presented five essential gold charts to help you put the yellow metal into perspective. Remember that past performance is not indicative of future results.
1. Price of Gold in U.S. Dollars, 1915-present
Notice an ounce of gold cost just under $20 in 1915.
2. Gold vs. U.S. Dollar Index, 1970-present
As you can see above, gold and the U.S. dollar traditionally have an inverse relationship. When the dollar is expensive, gold is cheap.
3. Gold vs. S&P 500 Index, 1970-present
4. Gold vs. U.S. Money Supply, 1981-present
5. Gold vs. U.S. Debt & Debt Limit, 1970-present
Frank Holmes, CEO of U.S. Global Investors, argues that the chart above indicates gold is currently undervalued:
“Between 2000 and 2015 the U.S. debt and the gold price have had a positive correlation of 93.7%. However, since 2012 the relationship has decoupled. To get back to the correlated relationship, the gold price would have to return to around $1,800, implying that gold is undervalued at current levels.”
These charts serve as a reminder to think long-term about gold and always be looking at the bigger picture. Call American Bullion at 1-800-326-9598 today to find out how simple it is to own gold.