Investing guru James Rickards says gold will hit $27,533 an ounce — and it’s ‘not a guess.’ Here’s his argument

It’s a good time to be a gold bug.

At the beginning of 2024, gold was trading at around $2,043 per ounce. At the end spring 2024 it was a little higher than $2,330, marking a gain of more than 10%. Now, at summer’s end 2024, gold is priced at $2,640.00 an ounce marking a gain of over a 25% and it continues its climb. All this is happening while the Dow is making new highs just like the summer of 2008, then stocks crashed 7,000 points and gold tripled in 2 1/2 years, all with our national debt (4) times less than today. Additionally, China & Russia have stopped buying our treasury bonds over (5) years ago and now are buying gold.

Looking further back, you’ll see that the yellow metal’s price was hovering around $1,300 five years ago. It’s come a long way.

Lawyer and investment banker James Rickards has long been bullish on gold. He previously forecasted that gold would reach $15,000 per ounce. Now, he’s raising that prediction to an even more optimistic figure.

“My latest forecast is that gold may actually exceed $27,000,” Rickards wrote in a recent column. “I don’t say that to get attention or to shock people. It’s not a guess; it’s the result of rigorous analysis.”

Behind the numbers

To establish a price prediction for gold, Rickards posed a straightforward question: “What’s the implied non-deflationary price of gold under a new gold standard?”

He explained that in a system in which dollars are freely exchangeable for gold at a fixed price, if gold price is too high, it will lead to investors selling gold for dollars and spending “freely.” Conversely, if gold price is too low, investors will “line up to redeem dollars for gold and then hoard the gold.”

Rickards highlighted that the U.S. M1 money supply is $17.9 trillion and assumed that maintaining confidence would require a 40% gold backing. He argued that this percentage was the legal requirement for the U.S. Federal Reserve from 1913 to 1946.

He then calculated that applying the 40% ratio to the $17.9 trillion money supply would require the U.S. to hold $7.2 trillion worth of gold.

According to the World Gold Council, the U.S. has 8,133 tonnes of gold reserves, or 261.5 million troy ounces. And that leads Rickards to the final step of his calculation.

“Applying the $7.2 trillion valuation to 261.5 million troy ounces yields a gold price of $27,533 per ounce,” he wrote.

A price tag of $27,533 for one ounce of gold would imply a staggering upside of more than 1,000%, relative to where the precious metal sits today.

Based on his analysis, Rickards’ advice is straightforward: “The lesson for you as an investor is to buy gold now.”

Buy gold Coins

The most tangible way to invest in gold is to buy physical gold in the form of bars or coins. The better your coins quality, the better your returns.

Gold bullion and higher quality certified , graded coins  can be purchased from reputable dealers and stored securely at home or in a safety deposit box.
Note : Your higher quality coins can many times be bought without a social security number making them a private transaction that cannot be traced. This financial privacy is a key point lost on many investors these days yet when it’s realized there will be a sudden rush to purchase so the sooner the better if you’re holding cash or other fiat (paper) based investments.

The advantage of owning physical gold is its stability and tangibility, providing a sense of security and ownership that isn’t dependent on financial institutions.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com