Gold Around the World

There is never any certainty when it comes to markets. We can only make investment decisions based on probabilities. Importantly, we can increase the odds in our favor by following two basic rules. Buy assets that are undervalued, and follow the trend. We are following both of these rules when buying gold.

As we can see from the charts below, gold is rising against all of the world's currencies. The rates of increase are of course different as some currencies are weaker than others. But regardless, it is clear that gold's long-term trend is rising.

What's more, gold is still undervalued. There is any number of ways to make this point, but perhaps the simplest is to look at the price of gold in inflation-adjusted dollars. In 1980 inflation-adjusted dollars, gold today is only $250 per ounce, which is not even one-third of the $850 record high reached that year.

There is one clear message from the above charts. Gold is breaking out around the world. People are fleeing national currencies. They are moving their wealth into the safety and security of gold, which is not too surprising. All national currencies are being debased by inflation and/or other monetary disorders. So what would you rather hold? Gold, or some national currency?

Published by GoldMoney
Copyright © 2006. All rights reserved.
Edited by James Turk, alert@goldmoney.com

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