Gold Has Not Reached Peak Levels

 Gold price are above $2,100 per Oz for few weeks now, and even touched $2,200 per Oz levels last week. Already many so called pundits and experts are saying Gold has reached all time highs, peak levels etc.

This is absolutely wrong. Gold is very cheap now.

Let me explain -

When Gold prices reached $1,900 per Oz 13 years ago, in 2011 that was much higher value for Gold in 2011 itself, then its current nominal value at $2,100.

Because in 2011, purchasing power of $1,900 worth of money was much higher then the value of $2,100 worth of money now as paper money gets inflated and loses its purchasing power over time.

Similarly when Gold prices had reached $850 per Oz in 1980 that was the all time high for gold, priced in USD.  Because the purchasing power of what all you could buy in 1980 with $850, was much higher then what little you can buy with $2,100 today.

Therefore in real purchasing power terms Gold is still very cheap. 

Gold Steadies Above $2,100 For A New Bull Market

Gold has steadied above $2,100 per Oz for more then a month now. This at a time, when interest rates have been highest since 20 years, for more than a year now in US, EU and UK. Even Japan is about to increase interest rates, for first time since 2007.

Yet, Gold typically does well when interest rates start falling. Just imagine how Gold would perform when interest rates do start falling, as high interest rates cannot be held on higher for longer, without some credit crises or financial crises happening, which will cause interest rates to fall.

So Gold is at the cusp of a major new bull market. 

The previous major bull market for Gold, which lasted from 2001 to 2013 - increased the price of Gold from $250 per Oz to $1,900 per Oz - and the bull market which started in 2001 has continued in other currencies beyond 2013.