Earlier this year, I did a first attempt to value gold. The problem with gold is clear: it is incredibly difficult to value an ounce of gold, because we have no yardstick or underlying value to measure gold against. Better put: we can value a company by estimating the future discounted cash flows that the company is able to generate. Subsequently, we can compare our valuation (the company’s “underlying value”) against the current stock price (the “market value”), with the knowledge that the market value in the long run always tends toward the “underlying value”. Yet, how could we possibly compare the “underlying” gold replacement value against the current gold price?

My Forecast for Gold Nine Months Earlier

What Does This Preliminary Model Forecast This Time Around?

Where Are We Heading?


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