Gold is pushing closer to $1,300 per ounce as the Federal Reserve hints at another round of monetary easing and investors ramp up worries about the inflationary effects of such a move.
I recently did an interview with The Gold Report that covered a lot of territory, including trends in new emerging markets, the potential impact of governmental policies and regulations under discussion, and other topics.
Here's an excerpt of my comments on what I see happening to the gold price in the event of competitive currency devaluation by countries seeking to grow their economies by growing their export sectors.
My thoughts are that in the next five years gold's going to double. That means it's going to grow at a 15 percent compounded rate of return, which is much greater than what's expected of bonds. ā¦ What's interesting is that gold's volatility for the past 10 years has been less than the S&P 500's volatility. If it doubles in five years, we're only going to get back to 1980 inflation-adjusted prices, at still a 15 percent compounded rate of return.
And how might this affect gold stocks?
What that means to gold stocks is much more significant because there's an approximate leverage of almost 3 to 1. So if gold doubles, you can turn around and get three times that in gold stocks, particularly those with characteristics that we have been able to do in our regressional studies that protect shareholder value with growth in production per share or reserves per share.
There's a lot more to the Q&A ā you can read the full interview at the Gold Report.
Also, you should check out the new interactive gold timeline our research team put together. It walks you through humankind's long attraction to gold. Browse the timeline.
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