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Real gold today is still well above its long run average of £515 still indicating large overvaluation and if it was to follow the history of 1980 has a long way to fall before a bounce.
I haven’t
written about gold priced in Sterling since June 2011. Since that time it reached a new all time
nominal Monthly Gold Price high of £1,121 in September 2011 and has since
fallen back to £1,003 as of Friday. All
of this action can be seen in my first chart.
For me though, it’s my second chart which corrects for the devaluation of sterling through inflation, that is the important one. This chart, which shows the Real (inflation adjusted) Monthly Gold Price, reveals to us that the peak in September came within 2% (£1,170 vs £1,151) of the January 1980 real peak before the fallback.
For me though, it’s my second chart which corrects for the devaluation of sterling through inflation, that is the important one. This chart, which shows the Real (inflation adjusted) Monthly Gold Price, reveals to us that the peak in September came within 2% (£1,170 vs £1,151) of the January 1980 real peak before the fallback.
Real gold today is still well above its long run average of £515 still indicating large overvaluation and if it was to follow the history of 1980 has a long way to fall before a bounce.