An ounce of gold will cost $10,000 as soon as global currencies crash and central banks have to appeal to a gold-backed monetary system, according to Byron King, editor of Jim Rickards’ Gold Speculator.
“If you take the global money supply, back it with 40 percent gold, you need $10,000 gold to make the math work, and that’s just using a 40 percent backing,” he said in an interview with Kitco News on the sidelines of the annual event set by Prospectors & Developers Association of Canada (PDAC). “And it has to do with the eventual demise of modern currencies.”
The analyst didn’t specify the timeframe for the gold price surge from the current $1,325 per ounce, but stressed that it would have to happen, as the current cash bubble, consisting of dozens of trillions in USD, cannot exist forever.
“It’s kind of like a story about the man who went bankrupt, slowly at first and then all of a sudden. It’s the same thing with the US dollar, with the euro, with the yen. We’ve created trillions and trillions, dozens of trillions, almost hundreds of trillions of dollars, of obligations that simply can never be repaid. It will have to happen,” the analyst said.
King noted that gold stocks at current valuations are rather more attractive at the moment than they were two years ago. The expert also said that today’s miners are backed by “better numbers” and “smarter geologists.”
“We are in a new gold bull cycle, we’re in a blip of six- or eight-month downturn, but it will turn around. These are fundamentally good companies with great value behind them,” he said.
The PDAC International Convention, Trade Show and Investors Exchange is an annual event for investors, companies and organizations connected with mineral exploration. The event, carried out in Toronto, reportedly attracts 1,000 exhibitors, 3,800 investors and 24,000 attendees from 130 countries.
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