Gold is at least 167% overvalued relative to inflation since 1913. $600ish gold makes sense. $1600 gold does not, let alone $2067, the 2020 high.
Meanwhile stocks are off-the-charts overvalued, about 93% relative to the post-Great Depression median valuation of 81 through 2019, as of the latest GDP figures from late May.
Speculation in both gold and stocks, not to mention a host of other things, has been driven by Federal Reserve interest rate suppression since 2001.
How long elevated gold and stock prices can persist in the new higher interest rate environment is anyone's guess.
The Fed Funds rate still averaged a low 1.69% in 2022, so it's still early innings.
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| May 25, 2023 |
