How to "Turn Back the Clock" on this $174 Billion Tech Titan
Perhaps you think it's impossible to score another 1,000% gain off this "tech titan" stock. Think again. An unusual strategy lets you virtually "recreate" gains off the biggest companies you thought had come and gone. CLICK HERE to see how it works.



What’s the “Fair Price” of Gold?

by Robert Williams, Publisher
Tuesday, September 29, 2009

The world’s been awaiting gold’s big push higher since Wall Street started unraveling over a year ago. Remember, gold is considered the foremost safe-haven investment during turbulent times because of its intrinsic value.

But since the Dow topped out in November 2007, gold has merely danced between $725/ounce and $1,000/ounce.

Last week, however, the yellow metal breached (and closed) above the $1,000/ounce level – thanks to the broad weakness in the U.S. dollar – for the first time in 18 months.

Gold futures have passed $1,000/oz this weekSo that got me thinking. What’s a fair price for gold?

Consider this…

On the strength of the extraordinary inflation in the 1970s, gold traded for $800/ounce by 1980. At the time, the Dow sat at 800, which represented a 1-to-1 ratio. And the historical high point of gold.

By the late 1990s, the Dow was above 11,000, while gold languished around $300/ounce, representing a 44-to-1 ratio. And gold’s low point (since President Nixon took us off the gold standard in the 1970).

At present, the ratio is about 10-to-1.

When you consider the state of the economy, the weak dollar, the bailouts, the health of the U.S. banking system and the like, the 10-to-1 ratio seems awfully high.

Conservatively, I think this market can support a 7.5-to-1 ratio, which would put the price of gold around $1,300/ounce. But before you pull the trigger, Lee’s article below reveals a brilliant way to own gold for cheap. While also getting paid to do it.

Ahead of the Tape,

Robert Williams

Publisher, Investment U

More on this topic (What's this?)
Ultimate Suburban Survivalist – 5 Tips for Gold and Silver Buyers
Dollar sinking; gold soaring!
Time to load up on gold and silver?
Read more on Gold at Wikinvest
Related Investment U Articles:



McAfee Secure sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams
Sign Up now and receive this Free report:

Contrarian Investing: Why It's Last Call for These Three Contrarian Investment Opportunities.




The Company Set to Dominate a $60 Billion-a-Year Market

$60 billion is spent on cancer treatment in the U.S. - each year. And one company is poised to receive the lion's share of it.

The medical director at the Alta Bates Comprehensive Cancer Center says, "...possibly a third of our cancer patient population will soon be undergoing this [company's] treatment."

Another doctor at the University of Texas MD Anderson Cancer Center says he intends to treat over 1,000 patients a year with this technology.

Here's how you can claim your stake in the company before this cash infusion sends shares soaring.

Share Investment U:
  • email
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • Propeller
  • StumbleUpon
  • Technorati
  • Yahoo! Buzz
  • Reddit
  • NewsVine
  • SphereIt
  • Twitter

2 Responses to “What’s the “Fair Price” of Gold?”

  1. Jeff Says:
    September 29th, 2009 at 7:22 pm

    I don’t understand how you think that the formula you’re following has value. If Dow was at 800, and the price of Gold was at $800, does it mean (theoretically) that the price of Gold can go crazy and reach $11000. I think a fair thing to do is to compare the price of Gold with how the dollar is performing.

    Reply

    admin Reply:

    Per Robert Williams:

    It does, in fact, mean exactly that! One would have thought that $800 gold in 1980 is just as preposterous as $11,000 gold is today.

    Reply

Comments

**By submitting your comment you agree to adhere to our Comment Policy and Privacy Policy.

Check out our selection of daily Investment Research:

IU Blackboard IU Archives



Protect your purchasing power – invest in these foreign currencies and precious metals.

Recent Articles



Search Investment U





Platinum Services

Oxford Club
The Oxford Club
is an exclusive, global network of investors, who collectively participate in the pursuit of prosperity and wealth. The Club is renowned for its market-beating, tried-and-true investment principles.


White Cap The White Cap Report exclusively identifies companies, White Caps, which - by being among the earliest to gain traction - have secured dominant positions within untapped, billion-dollar markets.

A More Profitable Way to Play the Market







What Readers Are Saying…

"Always enjoy what you have to say, and learn something new (and useful) almost every time. Thanks again for your outstanding work." Jeff K.

"I just want to say a quick thank you to Alexander Green for not only his sage advise, but his reassuring words of encouragement that we all need right now." Bryan W.




Robert Williams, Publisher

In addition to once being a full-time trader of equities and equity derivatives, Robert Williams has also served as the lead financial analyst for a Forbes top-50 private corporation and an analyst for the endowment of a major academic institution.

He's also been profiled in such books as Trade with Passion and Purpose and Alexander Green's The Secret of Shelter Island. Learn More...


What Robert Williams is working on right now:

This could be the only investment capable of turning as little as $50 into $204,100.

It produced 1,896% cumulative gains in 2008, as the S&P 500 tumbled 38%.

And while the S&P rallied 23% in 2009, top performers in this class of investment returned a cumulative 17,263%. That's more than 1,000-times what the market would have made you.

The real beauty of this opportunity is that you can get started with as little as $50. Find out how…