The correlation between the US monetary base and the gold price says gold will be $2,300 by January 2014, roughly a 30% rise within 15 months. Money printing since the 2008 financial crisis and the Fed’s promised ‘QE-ternity’ are responsible.
By year-end 2014, gold could easily be averaging $2,500 an ounce. That’s 41% above current price.
Some argue that this correlation may not continue. That’s true. And maybe the Fed doesn’t print till 2014. That’s possible. But it’s not just the Fed that’s printing money.
The UK, the ECB, Japan, China and Switzerland are all adding to their balance sheets. The largest economies of the world are grossly devaluing their currencies. This will not be consequence-free. Gold and silver will be direct beneficiaries.
There are other consequences, both good and bad, of gold hitting $2,000 and not stopping there. Investors should be prepared for the following: Tight supply; delivery delays; rising premiums; swelling profits for producers; the tipping point for a mania.
There will be an inflection point where the masses enter this market. The average investor won’t want to be left behind. Will that happen when gold hits $2,000? $2,500?
The message from these likely outcomes is to continue accumulating gold—or to start without delay. Waiting will have consequences of its own.
“People say that there’s nothing certain in life except death and taxes,” writes Clark. “In my view, $2,300 gold is a close second.”
To read Jeff Clark article: What Will The Price Of Gold Be In 2014?
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