Since president nixon took us off the gold standard by ending convertibility of dollars to gold, we have been living in a world of global inflation that can be exported to countries via economic war. With this in mind, is the value of gold going to stay at current prices or destined to go higher?
Lets take a look at the declared gold and their money supply that is backed by gold using gold to m2 ratios:
USA: M2 money supply in May 2017 is USD 13,495,500 million and 8,133.5 tons of gold in reserve. Value of gold = USD 51,600 M2 currency per ounce of gold.
Germany: M2 money supply in April 2017 is 2,802,900 million Euros and 3,377.9 tons of gold in reserve. Value of gold = 35,800 M2 Euros (USD 40,000) per ounce of gold.
Italy: M2 money supply in April 2017 is 1,457,986 million Euros and 2,451.8 tons of gold in reserve. Value of gold = 18,500 M2 Euros (USD 20,700) per ounce of gold.
France: M2 money supply in March 2017 is 1,912,541 million Euros and 2,435.8 tons of gold in reserve. Value of gold = 24,400 M2 Euros (USD 27,300) per ounce of gold.
China: M2 money supply in May 2017 is RMB 160,000,000 million and 1,842.6 tons of gold in reserve. Value of gold = RMB 2,700,000 M2 currency (USD 396,000) per ounce of gold.
Russia: M2 money supply in May 2017 is RUB 38,664,500 million and 1,655.4 tons of gold in reserve. Value of gold = RUB 726,000 M2 currency (USD 12,500) per ounce of gold.
Japan: M2 money supply in May 2017 is JPY 973,785,200 million and 765.2 tons of gold in reserve. Value of gold = JPY 39,500,000 M2 currency (USD 356,000) per ounce of gold.
India: M2 money supply in May 2017 is INR 27,373,590 million and 557.8 tons of gold in reserve. Value of gold = INR 1,500,000 M2 currency (USD 23,200) per ounce of gold.
UK: M2 money supply in April 2017 is GBP 1,648,754 million and 310.3 tons of gold in reserve. Value of gold = GBP 165,000 M2 currency (USD 211,000) per ounce of gold.
Singapore: M2 money supply in April 2017 is SGD 573,331.80 million and 127.4 tons of gold in reserve. Value of gold = SGD 140,000 M2 currency (USD 101,000) per ounce of gold.
Of course we can be highly skeptical of the official gold figures since no one audits the gold holdings of these countries. Despite this in mind, we can see that the global dominance of USD is set to mark gold at prices well around US $50,000 / oz.
Based on current political climate, with the east west cycle taking into fruition in the 21st century, we can see that the current suppressed prices are not here to stay. Countries under purchasing gold can be victims of economic warfare if the country is not backed by hard solid gold.
Best to buy some physical precious metals to hedge and protect yourself against volatile fiat dollars.