An 82-year old argument for gold valuation at $8,000 per ounce

Is there a case for gold at $8,000 per ounce? Franco-Nevada Chairman Pierre Lassonde looks at the gold/Dow ratio from 1934 and makes the case. Meanwhile, Bank of England Governor Mark Carney warns that Brexit poses a risk to domestic financial stability and could ‘amplify’ existing risks. The Trump train rolls on while Hillary Clinton hits a speed bump in the American heartland.

gold valuation

0:00today and i know i say that everything is actually a really interesting day so
0:06let me tell you why do you think be honest with yourself do you think it’s
0:11possible for the gold price from its current level of 12:56 in us-dollar
0:15terms to rise 1200 and 49% from here you think about that when I get to the third
0:24most important story of the day in that story is a little bit of a political one
0:29but I pointed out because the US Dollar Index a slightly down from its peak late
0:33last year still around 97 but it didn’t go down yesterday when Donald Trump one
0:38State Michigan Republican primary
0:41also instead of mississippi on the democratic side of the ticket it was a
0:45little more interesting Hillary Clinton one Mississippi and South which is near
0:49her home state of arkansas and Bernie Sanders 1 in Michigan another one
0:55expected that it’s not a huge move but it shows that changes could be in it for
0:58a longer time and it’s still not quite clear that clinton’s the slam dunk it
1:04didn’t seem to affect the dollar index was up on the table keep an eye on it
1:08and we’ll keep an eye on it was relation to the gold price second story is over
1:12my shoulder I mentioned yesterday that Mark Carney front of the Treasury
1:16parliamentary committee to talk about the risks he did mention specifically
1:21the risk to the British Crown as a result of that pound lost the most of
1:27its last two weeks as investors digested what the Bank of England governor said
1:32Carney said this is just brush it was a risk to domestic financial stability and
1:38it had the potential to amplify existing risks those existing risks would be the
1:44current account deficit in the trade deficit fall in the pound would make it
1:48probably better for Britain’s exporters that that is of course was the subject
1:52last week’s newsweek magazine so if you want to understand the story of what it
1:56means to you as an investor for stocks to buy redmond you picked it up and read
2:02Alex Williams story on page 24 now let’s get to the prediction by insider in the
2:10gold market that the gold price could be ready
2:13early rise 1249 percent keep in mind these are the sort of predictions that
2:18get made in a rising market people tend to jump ahead of each other and make
2:23even more outlandish prediction that the man making this forecast was Pierre
2:29Lassonde chairman of prank call that a large gold and copper company reported
2:33out one interesting fact he used the cold to Dow rose show so that a 1934 the
2:41golden ratio was thirty was almost one so lots of gold costs $36 Dow Jones
2:48Industrials index was 37 in 1980 gold down trade show was almost one now it’s
2:54a cold cost $100 the Dow Jones was it
2:58800 now it’s interesting to point out that both of those were wildly different
3:02laboratory environments 1934 what is the middle of the Great Depression largely
3:06environment financial stocks fell the gold price did relatively better 1980
3:13completely different story the end of a long period of inflation interest rates
3:16were lower was on the verge of taking urs interest rates to double digits to
3:21quell inflation the gold price did better than financial stocks now as you
3:25may know the Dow Jones closed yesterday at sixteen thousand nine hundred and
3:30sixty-four so racial of 121 and outs of gold in the doubt but obviously the debt
3:36amounts of gold at 16,000 almost $17,000 would be a massive increase from here
3:431249 percent but some pointed out that it might not even be a one-to-one ratio
3:48could be two-to-one ratio that’s where he got the forecast for the observation
3:53that’s possible for gold to go to $1,000 an ounce now I wouldn’t say it
3:59outlandish prediction question is we know that the past is not an accurate
4:05predictor of future results but we also know that both deflationary and
4:09inflationary environments announced of cold but you a share of the dow jones
4:14industrials will the same happening and if so when
4:19well I don’t happen today but if it does you will hear about it tomorrow here in
4:24the capital market update so for today I’m dandelion from London