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| A “golden constant” perspective suggests a fair value price for gold of $825 an ounce (HERE) |
Campbell R. Harvey (Aug 3, 2015) - Using the U.S. Consumer Price Index as an arbitrary, though conventional, fundamental driver of the price of gold, the high real price of gold has been about 8.73, the low real price of gold has been about 1.47 and the current real price of gold is about 4.63.
[...] There are at least two ways to think about the current historically high real price of gold. One is that the real price of gold may “mean revert” towards the horizontal rust colored line, the golden constant value for gold linked with the average real price of gold. Or it is also possible that all of “history is more or less bunk”, as Henry Ford once put it, reflecting an idea that bold investors and innovators were never slaves to history.