Gold-Backed Tokens Outperform Crypto Market. Further Upside Coming?

The crypto market has been on a recovery trend lately. Even with the market crash, it had already marked a year of massive returns for investors in the space. As is expected with a space with high volatility, crypto assets had begun to crumble in value. But despite the profitable year for cryptocurrencies, a subset of crypto tokens had made their mark as the assets with the highest returns, and they don’t look to be stopping anytime soon.

Gold-Backed Tokens Surge

These gold-backed assets have helped to increase the liquidity of gold by enabling the ownership of small fractions of gold. Physical gold is somewhat limited in its supply and tokens like this have provided an avenue for investors to get in on the millennium-old asset. These tokens follow the price of a commodity, gold in this case, in the same way, that stable coins follow the price of the fiat currency they are pegged to.

Unlike gold ETFs, gold-backed crypto tokens allow investors to own a part of a physical gold bar, whereas investors are mainly betting on the price of gold with ETFs. Furthermore, investors are able to redeem their gold-backed tokens for physical gold whenever they want.

These characteristics have drawn more and more investors to these commodity-backed crypto tokens and as a result, the price of these digital assets has grown tremendously. So much so that these assets have been able to outperform the crypto market at large.

Gold-backed tokens soar

Gold-backed tokens outperform crypto market | Source: Arcane Research

Two of these gold-backed commodities have recorded the highest growth; Tether Gold (XAUT) and PAX Gold (PAXG). These two crypto assets have grown to a market cap of $409 million and $358 million respectively, marking a significant growth year for each asset.

Beating The Crypto Market

Even with the crypto market marking several bull runs in 2021, gold-backed tokens have managed to outperform the market. In 2021, the overall crypto market had grown a total of 150%. In contrast, the gold-backed token market surged as high as 360% in the same time period, returning more than twice that of the broader crypto market, with PAX Gold and Tether Gold leading the charge.

Other commodities-backed crypto tokens have also begun to gain prominence in the market. Others have emerged that have been tied to silver, palladium, and even oil, but all of these have been met with obstacles that they have found hard to scale, stunting their growth.

Nevertheless, the gold-backed tokens have shown that commodities-backed tokens do have a future in the market. With growth expected to continue across the crypto market, these tokens may be on their way to being one of the most profitable subsets of crypto investments in the space.

Bitcoin vs. Gold: Which is a Better Buy this Fall?

Both assets provide a wide range of benefits to portfolios though which one comes out on top?

 

With central banks all over the world seemingly having a debasing contest over their currencies, and as inflation looms, it might be the time to revisit those inflation hedging strategies.

Naturally, the hot topic is: between Bitcoin and gold, which is the best inflation hedge and superior hard money?

We’ve compiled several traits and compared the two. Here’s what we’ve found:

Historical evidence

Gold has been a trusted store of value for millennia, whereas Bitcoin is a new disruptive tech and despite its short existence, it has faced and endured its trials and tribulations and is still very much standing, making it clear that it is here to stay.

And the longer Bitcoin sticks around, the higher the public’s confidence levels will reach.

Scarcity

Having unlimited supply does not correlate with being a good store of value. By design, Bitcoin supply is capped at 21 million. Gold has always been scarce throughout history, but it also has certainly seen increases in its supply.

Intrinsic Value

Gold has intrinsic value as a commodity as there is demand for gold in several industries, outside its basic functions of money. Bitcoin, on the other hand, does not.

Moreover, if people by lack of confidence do not accept it or its monetary functions, Bitcoin will simply have no value.

However, having no intrinsic value can also be a positive trait as if it has no other functions, it is also not a subject to supply shocks.

Fungibility

For an item to be fungible, it must be able to be replaced by another one exactly like it. As such, exchanging a bar of gold for another bar could be regarded as easier than exchanging Bitcoins as, despite having the same value, Bitcoin’s traceability on the blockchain may make some comes not so fungible as they can be linked to illicit trading and thus not be accepted by merchants.

Gold, however, retains its value and even if it is centuries old, it can still be accountable in our days. With that being said, there are very encouraging signs that Bitcoin’s network will work on improving both its privacy and anonymity as well as its users’.

Durability

Despite showing clear signs of durability, it is still too early to comment on Bitcoin as many believe the network is still at its infancy and regulatory actions or hackers might try hamstring it. Gold, on the other hand, has been around for many centuries and has since been able to retain its position as a valuable asset and store of value.

Divisibility

Although gold can be divisible by weight, unlike Bitcoin’s proposition, gold can hardly serve the purpose of being a medium of exchange in society.

Transportation

Comparing the two here is stating the obvious. Whereas transporting gold is risky, time consuming, and a very difficult endeavor, Bitcoin can process transactions across the world at the speed of lightning.

Authenticity

Gold’s authenticity is easily verifiable. Bitcoin’s authenticity is verified by cryptographic signatures, mathematical formulas, and a decentralized network, all of which working in unison.

Confiscation and Resistance to Censorship

Bitcoin is decentralized and distributed in a peer-to-peer network, making it very resistant to censorship, whereas gold’s physical properties can make it both challenging in terms of mobility and susceptible to being regulated.

In what concerns confiscation, there have been laws which made gold ownership illegal. Moreover, when transporting gold, confiscation risks might be looming depending on the value being transported. Bitcoin is less prone to confiscation.

Wrapping up

We’re inclined to say that Bitcoin outperforms gold in many of these categories, but not all of them.

Some may say that Bitcoin is probably the hardest form of money ever to be created while others claim it is risk prone as it is still a nascent technology.

But even though gold has proven itself as money for millennia, withstanding the test of time and earning its trusted status, Bitcoin’s astonishing potential upside makes us think that it might be good to consider having both of them in our portfolios.

Bitcoin vs Gold: Gold’s flash crash has all the ‘finger prints’ of a…

The age-old Bitcoin vs. Gold debate is in the limelight quite often and has picked up again, with Bitcoin’s recent price action. While Gold’s price crashed and is in negative territory since the start of the year, Bitcoin was up by 50%. Does this reflect on which is the “better store of value” arguments?

Gold’s price went through a major correction as it dipped by roughly 5% in a matter of hours. Despite a recovery, the current price is still about 9% down since the start of the year.

On the other hand, Bitcoin was trading above the $45.5k mark with a surge of about 2.5% in 24 hours.

In addition to this, Bitcoin’s 10-year ROI (Return On Investment) has hit +457,703% to make its stand against gold, silver, and traditional time-tested stocks. It outperformed Gold in terms of ROIs or return(s) on investment(s). According to Wu Blockchain, the ROI of gold in the past 10 years has been around 0 percent (cumulative).

The Chinese journalist mentioned in his tweet,

“According to Trading View data, gold fell by nearly 5% today, and the 10-year investment return once fell to a negative number. CoinMarketCap data shows that in the past 24 hours, Bitcoin has fallen by nearly 2% and Ethereum has fallen by more than 5%.”


Given the long-standing rivalry between Gold and Bitcoin, many members of the cryptocurrency community had something to say. Forex trader and analyst Peter Brandt took to Twitter to express his viewpoints on Gold’s price correction.

In another tweet, Kevin Zhang, vice president of crypto mining company Foundry Services, jokingly asked whether the yellow metal was under a 51 percent attack. Having said that, here’s an interesting argument.

When comparing Gold to Bitcoin, the former has been a tradeable asset for more than 50 years on markets whereas the latter’s trading past is only around 10 years old.

Gold’s ROI, in the beginning, clocked around or even more, than 2,000% growth since the asset was more volatile due to immaturity. Similarly with Bitcoin, due to its immaturity, institutional interests, size as well as fluctuations in its price, it can showcase a great market performance.

Still, with the the doubts revolving around its long-term growth, its rivalry with Gold, in the long run, will be worth watching.

 

 

Bitcoin Vs Gold – Is PlanB comparing apples to oranges, or is BTC at $135K still in play?

  • PlanB reignites Bitcoin vs gold debate: Will BTC reach $135K by Dec 2021?
  • PlanB’s latest tweet reignites the Bitcoin vs gold debate
  • At current rates, 1 BTC is equal to 18 ounces of gold
  • PlanB predicts that BTC denominated in gold is set to rise further

PlanB, the famed crypto analyst and stock-to-flow expert, has broken his self-proclaimed six-week hiatus from crypto predictions. In his latest tweet, he has once again bought the Bitcoin vs gold debate at the center by claiming that BTC denominated in gold will rise in value in accordance with BTC value.

It is a universal fact that gold has been a time-tested storehouse of value. For centuries, people have used gold to store and pass on their wealth to future generations. Governments have relied upon gold to secure their financial credibility.

The gold standard was the De Facto currency benchmark until 1971 when the U.S. dollar was delinked from gold.

Now, Bitcoin promises similar value storehouse characteristics. Modern financial pundits often compare Bitcoin with gold considering its price movements in volatile times, which mimic other safe-haven assets. But to what extent is the Bitcoin vs gold debate valid, and for how long?

PlanB opens up Pandora’s box – BTC denominated in gold sends positive vibes

For a few years now, Bitcoin price movements and correlation with gold have fascinated crypto analysts. During the 2020’s March crash, Bitcoin showed similar safe-haven characteristics by rising in accordance with the turbulent times. So far, Bitcoin has outperformed gold by a significant margin, especially in the last year.

PlanB, known for his highly bullish crypto tweets, claimed that BTC could touch $2,88,000 by 2024. The bullish BTC price prognosis comes from his famed stock-to-flow analysis, which uses complex forecasting technical indicators.

Despite the recent price dips and stagnation, the price is going to entice the traders and investors to HODL.

His studies always seem fixated on overly bullish long-term price goals. Even in the worst case, PlanB says that BTC would cross $1,35,000 by the end of 2021. These lofty price levels may seem unreal, but he has a huge fan base that believes in his technical analysis.

BTC/USD stock-to-flow model – Is Bitcoin vs gold comparing apples to oranges

With an all-time high of $64,000, Bitcoin is far from the PlanB’s predicted levels. Multiple charts show that heavy to very-heavy resistances are blocking the Bitcoin’s journey to fresh highs. At present prices, 18 ounces of gold are equivalent to 1 BTC.

Bitcoin price is hovering near $34,000, and it is a long journey from here to $1,35,000, considering there are only five months left in 2021. Calls for another bearish phase in BTC are growing as the digital asset aims to integrate more into the mainstream finance.

PlanB’s latest cryptic tweet has certainly ignited the Bitcoin vs gold debate in the crypto circles no matter the price.

 

Gold is up on the month but down over $50 on the week

Gold futures declined over $19 today, with the most active contract (June 2020) breaking below a key support level at $1700, and is currently fixed at $1693.90. However, even with the declines that have occurred this week gold pricing still gained 6% this month.

Lower gold prices were curtailed somewhat by dollar weakness. The U.S. dollar index is currently fixed at 99.015 and is showing a net decline of – 0.63% in trading today. Dollar weakness today took the index below its 50-day moving average, a key indicator analyst used to determine the short-term trend of a stock, commodity or index.

Spot gold sold off even harder currently fixed at $1684.80, after factoring in today’s decline of approximately $29. According to the KGX (Kitco Gold Index) selling pressure took gold pricing down $38, however dollar weakness softened that decline by $8.70, resulting in today’s decline of $29.30.

Today’s weekly jobless claims came in at 3.84 million new unemployment claims, slightly above economists’ estimates of 3.5 million indicating that the economy continues to contract.

According to Tyler Richey, co-editor at Sevens Report Research, and reported in MarketWatch, traders moved to “square their books into the end of the month,”

Statements made by both the Federal Reserve and the ECB (European Central Bank) indicated that both entities will continue to take emergency steps to help curb a contracting GDP in the United States as well as the eurozone. The Fed announced that they will leave federal funds-rates at near zero, and reiterated that it will continue to use all and any policy tools available to them. The ECB allocated €750 billion for a Pandemic Emergency Purchase Program, and also left their interest rates unchanged.

On a technical basis gold broke through two key levels of support today as it traded to lower pricing. First gold futures traded and closed below the key psychological level of $1700 per ounce. Secondly it broke below the 21-day exponential moving average which is currently fixed at $1699. While pricing is still above the 50-day moving average, which is currently fixed at $1648.50, this week’s sharp decline of over $50 is bewildering.

Currently we show the next level of support at $1681.80, which is the 50% retracement of the most recent rally which began at $1580 and concluded at $1788. Below that is the next level of support occurs at $1660 which corresponds to the 38% Fibonacci retracement of a larger data set beginning on March 16th when gold was trading at $1451 per ounce, and concludes at this year’s high of $1788.

Source: kitco.com

Gold trades fractionally higher, overcoming a drop in consumer confidence

Gold Tops $1,750/oz; Ends Trading Week At Best Price Since October 2012

Precious metals prices gained Thursday, the final trading day of the holiday-shortened week. Major U.S. and European markets are closed tomorrow, April 10, in observance of Good Friday. All the metals scored weekly increases. As for the day, silver jumped 5.6% to end at a more than one-month high and gold soared 4.1% to notch a more than seven-year high.

Gold prices rallied 6.5% this week, logging a more than seven-year high

Gold for June delivery on Thursday jumped $68.50 to settle at $1,752.80 an ounce on the Comex division of the New York Mercantile Exchange. The settlement was the highest for gold since it closed at $1,753 an ounce on Oct. 17, 2012.

“The market is flooded with cash from central banks around the world which is inflating gold prices at this highly uncertain time,” MarketWatch quoted Craig Erlam, senior market analyst at Oanda, in a daily research report.

Gold futures surged 6.5% this week after sliding 0.5% last week. The yellow metal is 15.1% higher on the year to date. In looking ahead to next week, Kitco News offers the following forecasts via their Wall Street & Main Street surveys:

“All fifteen market professionals who took part in the Wall Street survey look for gold to rise next week…”

“Meanwhile, 1,172 votes were cast in an online Main Street poll. A total of 821 voters, or 70%, looked for gold to rise in the next week. Another 222, or 19%, said lower, while 129, or 11%, were neutral.”

Elsewhere, silver for May delivery advanced 84.8 cents to settle at $16.053 an ounce. The close was the highest since March 6 when silver ended at $17.263 an ounce. Silver futures traded 10.8% higher this week after falling 0.3% last week. They are down 10.4% on the year.

In other precious metals prices on Thursday and for the week:

  • July platinum added $15, or 2%, to end at $748.60 an ounce, for a 4.3% weekly gain.
  • Palladium for June delivery gained $14.80, or 0.7%, to finish at $2,110 an ounce, for a 0.2% increase on the week.

The two are split on the year so far with platinum off 23.4% and palladium up 10.5%.

London Precious Metals Prices (LBMA)

London precious metals prices ended divided Thursday and gained on the week. In comparing their levels from Wednesday PM to Thursday PM:

  • Gold rose $32.85, or 2%, to $1,680.65 an ounce.
  • Silver added 11 cents, or 0.7%, to $15.175 an ounce.
  • Platinum fell $6, or 0.8%, to $735 an ounce.
  • Palladium declined $14, or 0.6%, to $2,166 an ounce.

In LBMA weekly results, gains reached 4.2% for gold, 5.5% for silver, 2.9% for platinum, and 1.2% for palladium.

US Mint Bullion Sales in 2020

United States Mint bullion sales slowed from a week ago. In week-over-week comparisons:

  • Sales of American Platinum Eagles were flat after rising by 25,000 coins last week.
  • Combined sales of American Gold Eagles rose by 12,000 ounces after rising by 43,000 ounces last week.
  • Sales of American Silver Eagles moved up by 350,000 coins after increasing by 650,000 coins last week.
  • Sales of American Buffalo gold coins were flat for a second week in a row.

Below is a sales breakdown of U.S. Mint bullion products with columns listing the number of coins sold during varying periods.

US Mint Bullion Sales (# of coins)

 Thursday Last Week This Week January February March April 2020 Sales
$50 American Eagle 1 Oz Gold Coin 0 43,000 12,000 38,000 3,500 133,000 45,500 220,000
$25 American Eagle 1/2 Oz Gold Coin 0 0 0 23,000 2,000 8,000 0 33,000
$10 American Eagle 1/4 Oz Gold Coin 0 0 0 18,000 2,000 20,000 0 40,000
$5 American Eagle 1/10 Oz Gold Coin 0 0 0 60,000 20,000 95,000 0 175,000
$50 American Buffalo 1 Oz Gold Coin 0 0 0 21,000 1,000 47,500 0 69,500
$1 American Eagle 1 Oz Silver Coin 0 650,000 350,000 3,846,000 650,000 5,482,500 350,000 10,328,500
$1 American Eagle 1 Oz Platinum Coin 0 25,000 0 14,500 9,300 31,200 0 55,000

Continue reading Gold Tops $1,750/oz; Ends Trading Week At Best Price Since October 2012

2020-W $50 Proof American Buffalo Gold Coin Released

Today, April 9, the United States Mint kicked off sales of the 2020-W $50 Proof American Gold Buffalo. Made for coin collectors and containing 1 ounce of .9999 fine 24-karat gold, the piece debuted for $2,315.

U.S. Mint product Images for the 2020-W $50 Proof American Buffalo Gold Coin. The coin ships in a hardwood box with a matte finish and a leather-like inset. It is accompanied by a Certificate of Authenticity.

This release is the numismatic version of a companion bullion coin made for investors. Both are authorized under Public Law 109-145.

“The American Buffalo One Ounce Gold Proof Coin is the first 24-karat gold proof coin ever struck by the U.S. Mint and is the coin collector version of the official United States Mint American Buffalo Gold Bullion Coin,” the U.S. Mint describes.

Sales of Proof American Buffalo Gold Coins from 2006 to 2019

The first proof American Gold Buffalo launched in 2006. The 1-ounce coins opened at prices and achieved sales of:

Year Debut Price Final Sales
2019 (released on April 12) $1,660.00 14,279*
2018 (released on May 10) $1,710.00 15,756
2017 (released on May 11) $1,590.00 15,810
2016 (released on March 31) $1,590.00 21,878
2015 (released on April 9) $1,590.00 16,591
2014 (released on May 8) $1,640.00 20,557
2013 (released on May 23) $1,790.00 18,594
2012 (released March 15) $1,960.00 19,715
2011 (released May 19) $1,760.00 28,683
2010 (released June 3) $1,510.00 49,263
2009 (released October 29) $1,360.00 49,306
2008 (released July 22) $1,199.95 18,863
2007 (released May 23) $825.95 58,998
2006 (released June 22) $800.00 246,267

*The 2019-dated coin is currently unavailable. The U.S. Mint last published it sales through the week ending Jan. 12, 2020, so its final figure is likely higher.

Along with the 1-ounce proof and bullion coins, the U.S. Mint has issued other variations of the American Gold Buffalo to include fractional editions and a special reverse proof to celebrate the anniversary of the designs.

Coin Designs

The gold coin’s obverse showcases a right-facing portrait of a Native American. The image by James Earle Fraser is said to be created from a composite of three different individuals. Inscriptions around the design include ‘LIBERTY’, a ‘W’ mint mark to denote its production at the West Point Mint, ‘2020’, and an ‘F’ for the artist’s initial.

This image shows the gold coin’s obverse or heads side

On the reverse, also designed by Fraser, is a single American Buffalo, or bison, surrounded by inscriptions of ‘UNITED STATES OF AMERICA,’ ‘E PLURIBUS UNUM,’ ‘IN GOD WE TRUST,’ the coin’s legal tender face value of ‘$50’ and its weight and fineness of ‘1 OZ. .9999 FINE GOLD’.

This image shows the coin’s reverse or tails side

Coin specifications include a diameter of 1.287 inches (32.70 mm), a weight of 31.103 grams, and a reeded edge.

Ordering

The 2020-W $50 Proof American Buffalo Gold Coin may be ordered directly from the U.S. Mint via its webpage dedicated to gold coins, or by calling 1-800-USA-MINT (872-6468).

Its price of $2,315 will change over time, possibly weekly. The Mint’s numismatic gold coins are tied to its pricing matrix and gold market conditions.

by CoinNews.net

Gold Dips 0.7% on Monday, March 30

Gold, silver and platinum futures declined on Monday while palladium prices edged higher.

Gold futures fell $10.90 on Monday, March 30

Gold for June delivery — the new, most-active contract — shed $10.90, or 0.7%, to settle at $1,643.20 an ounce on the Comex division of the New York Mercantile Exchange.

“The recessionary fallout of the Covid-19 outbreak on the global economy suggests investors are likely to continue to seek refuge in gold,” analysts at BNP Paribas said in a note reported by Reuters. “We expect demand for gold to remain strong, at least until such time that economic conditions stabilize and the outlook begins to improve following the raft of unprecedented stimulus measures put in place by governments and central banks alike.”

Gold futures ranged from a low of $1,632 to a high of $1,673.60. They jumped 9.5% last week.

Silver for March delivery fell 40.2 cents, or 2.8%, to settle at at $14.132 an ounce. Silver futures traded between $13.94 and $14.71. They rallied last week by 17.4%.

In other precious metals futures Monday:

  • July platinum declined $17.80, or 2.4%, to $723.80 an ounce, ranging from $710.90 to $745.10.
  • Palladium for June delivery inched up 80 cents, or 0.04%, to $2,197.60 an ounce, trading between $2,105.30 and $2,224.

Last week, platinum gained 18.9% and palladium soared 42.6%.

London Precious Metals Prices (LBMA)

In comparing earlier fixed London gold and silver prices from Friday PM to Monday PM:

  • Gold rose $1, or 0.06%, to $1,618.30 an ounce.
  • Silver fell 26 cents, or 1.8%, to $14.055 an ounce.

In LBMA results last week, metal prices increased by 8.2% for gold, 13.3% for silver, 20.8% for platinum, and 37.8% for palladium.

US Mint Bullion Sales in 2020

United States Mint bullion sales were unchanged Monday following solid gains last week. Below is a sales breakdown of U.S. Mint bullion products with columns listing the number of coins sold during varying periods.

US Mint Bullion 
Sales (# of coins)		 Monday Last Week January February March 2020 Sales
$50 American Eagle 1 Oz Gold Coin 0 50,000 38,000 3,500 123,500 165,000
$25 American Eagle 1/2 Oz Gold Coin 0 5,000 23,000 2,000 8,000 33,000
$10 American Eagle 1/4 Oz Gold Coin 0 14,000 18,000 2,000 20,000 40,000
$5 American Eagle 1/10 Oz Gold Coin 0 25,000 60,000 20,000 95,000 175,000
$50 American Buffalo 1 Oz Gold Coin 0 2,000 21,000 1,000 47,500 69,500
$1 American Eagle 1 Oz Silver Coin 0 1,650,000 3,846,000 650,000 4,832,500 9,328,500
$1 American Eagle 1 Oz Platinum Coin 0 0 14,500 9,300 6,200 30,000

 

by CoinNews.net

Opinion: Why gold won’t save your portfolio from inflation’s bite

By Mark Hulbert
Columnist

Think gold will be a good inflation hedge in coming months? Think again.

Consider: If gold GCJ9, -0.34% were a good inflation hedge, its inflation-adjusted price would be constant. Yet, while U.S. inflation (as judged by the Consumer Price Index) has declined in each month since last October, gold has risen nearly 12%. In the process, the gold-to-CPI ratio has risen markedly, from below 4.8 to nearly 5.3.

Of course, five months is a short period of time. But even over periods of several years, or even decades, the gold-CPI ratio fluctuates wildly. The ratio got as low as 1.5 in the early aughts, for example, and as high as above 8.0 earlier this decade.

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Might it be that gold is instead reacting to expected, rather than realized, inflation? It’s hard to see how that does any better job explaining gold’s recent behavior. Consider 30-year expected inflation, as judged by the 30-year breakeven inflation rate (the difference between the yields on the 30-year Treasury and 30-year TIPS). That rate has declined from 2.13% in October, according to the St. Louis Federal Reserve, to its current 1.85%.

To be sure, inflation is not the only thing that makes gold go up or down. In a recent MarketWatch column, Michael Brush listed several other factors. But inflation is, by far, the leading suspect. And you have to torture the inflation data a lot to generate a forecast that gold should rise significantly over the next several years.

Consider the study “A Golden Dilemma,” which the National Bureau of Economic Research began circulating several years ago. The study was conducted by Campbell Harvey, a finance professor at Duke University, and Claude Erb, a former commodities portfolio manager at TCW Group. The researchers proposed a fair-value model for gold that was based on the average historical ratio of gold to CPI.

That average is 3.57-to-1, based on data since gold began to trade freely in the early 1970s. The researchers’ implied forecast is that, whenever gold trades significantly above or below this level, it eventually will return to trade at that ratio again. Call it reversion to the [golden] mean, if you will.

What does this mean now? For gold to justify its current price in terms of inflation, the CPI either needs to be 47% higher or gold needs to trade for $902.

Many scoffed at the researchers when they first circulated their study in late 2011, when gold was trading above $1,700. Gold’s subsequent decline led many to take their research a lot more seriously. Unfortunately for gold investors, their study continues to imply that gold’s fair value is a lot lower than where the yellow metal stands.

It’s worth noting that the study did find an historical basis for believing gold to be a good inflation hedge. But the yellow metal does this better job only over super-long periods — measured in centuries rather than years. Over shorter periods, including periods as long as an investment lifetime, they showed that gold fluctuates widely relative to inflation.

This in turn means that it’s entirely conceivable that gold could rise markedly over the next several months. But if it were to do so, it would become even less tethered to the inflation data than it already is. Note carefully that, if that is what you’re expecting, you can’t then turn around when the CPI jumps up to argue that gold’s price should respond bullishly.

The researchers’ forecast merely is that, regardless of whether gold rises or falls over the next few months, gold eventually will return to trade at the mean of its historical ratio to the CPI.