The Path to $10,000 Gold — Jim Rickards

I’m very impressed with the recent gold action because it’s holding its own in the face of an impending rate hike. It’s fallen off a bit, but not dramatically. It tells you there are good fundamentals behind it, independent of the threat of a stronger dollar.
I believe the Fed is preparing to raise into weakness and will have to reverse course in April or May. What happens to gold then? It’s going to go higher again, because the Fed will cheapen the dollar, and that’s very bullish for gold. So I expect gold to take off in the spring and finish the year very strongly. It could challenge $1,300 or $1,400.
Now, as many of my readers know, my long-term forecast is for $10,000 gold. We’re obviously not there now. So how do I arrive at $10,000?
I want to give the basis for that forecast. I never give any forecast without giving the analysis behind it. Anybody can pull a prediction out if a hat. If you don’t have the analysis to back it up I’m not interested.
So let’s go through the math, because there is a solid mathematical basis for $10,000 gold. It’s actually the implied non deflationary price of gold under a gold standard.

This post was published at Daily Reckoning