Economist Online

In reading Campbell Harvey’s research on gold, I thought the following 3 charts were most interesting.

1. the real price of gold in the last 200 years

- the current period of price surge of gold has been extraordinary, even dwarfing the gold bubble in late 1970s.  The #1 fact to bear in mind is gold price will eventually tumble in a very big way – it’s fool’s game that you think you can time the market.

2. how the gold price is related to real interest rate

- in my mind, I always think real interest rate plays a bigger role in determining the price of gold than any other factors, incl. inflation.

3. three elasticities of gold price: a. jewelry demand; b. investment demand; c. technology demand

- jewelry demand responds negatively to gold price: as price increases, fewer people can afford it in countries like India and China, where gold jewelry is popular.

- the waning jewelry demand is more than offset by increasing investment demand, especially in the age of ETFs.

- technology demand (or rather supply) responds to gold price very slowly due to the fact innovation in mining gold takes time, but eventually it will catch up.

WSJ interview of Jim:

Is a crash imminent?

(graph courtesy of Cumstock Partners)

The usual plain-word no-nonsense Jim Rogers:

Victor Sperandeo, George Soros’ former trader, commonly nicknamed as trader Vic, himself a wall street legend, shares his views on many interesting issues today: US economy, bond outlook, inflation, US dollar, gold and silver. A very insightful piece. I highly recommend it.