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The last few years have been rather average for gold investors. The gold price tanked in 2013 and ever since the gold price has been mostly moving sideways, fluctuating between €950 and €1100 per troy ounce. Valuing a company is tough, but the basic valuation principles are crystal clear: you value a company by taking the present value of all its future (net) cash flows. The principles of valuation are equally clear in the case of everyday commodities, such as wheat and crude oil, for which a demand and supply analysis will do the trick. But how do you value gold? Deutsche Bank tried eleven ways and reached eleven different conclusions. The German bank arrived at an average valuation of $1,015 per troy ounce (about €900), but with outliers on both extremes.

Gold as Store of Value

Source: Deutsche Bank

Source: Deutsche Bank

Gold as Medium of Exchange

Source: Deutsche Bank

Gold as Commodity

Source: The Gold Standard Institute

Source: Deutsche Bank

The attempt of the Deutsche Bank to estimate the “fair value” of gold. Source: Deutsche Bank

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