How significant is this recent rally in the gold price? To answer that question – we have plotted annualised nominal and CPI adjusted gold price (US$/oz) from 1968 up to the present.
Before 1975 the price of gold was effectively mandated. Order (No. 6102) signed by President Roosevelt (1933) forbade the “hoarding” of gold coin, bullion, and/or certificates (although ownership in mining equities was unaffected); and it was only repealed by President Ford at the beginning of 1975, allowing price discovery. Thereby, forming the precursor for the gold boom in the late 1970s, early 80s.
The recent rally in the gold price has clearly penetrated that particular high-water mark, the question then becomes – why and why now?
We think in recent years there is the growing realisation among the banking elites that various currency fiats are failing more quickly than previously forecast. This has coincided with a decade long effort by virtually every Central Bank to increase existing bullion holdings. Since the recent demise of SWIFT, every unaligned nation has had to take international payment precautions, unsurprisingly, there has been a dramatic move by a number of countries to repatriate their gold holdings from London and New York.
We remind that Gold recently overtook the Euro as the world’s second largest international currency reserve. The “barbarous relic” is back!
