AFTERNOON UPDATE

Gold on the mend after sharp decline from the $1850 level
Myrmikan says five-figure pricing for gold what history and math suggest

(USAGOLD – 2/2/2022) – Gold is on the mend following its decline over the past five days from the $1850 level. It is now back over the $1800 mark after briefly touching $1782 last Friday. Financial markets collectively still reflect a confused state of mind, with volatility the prominent feature. Gold and silver have not been exceptions. The yellow metal closed at $1802 this afternoon – up $4.50 on the day. Silver was up 12¢ at $22.65.

One of the more bullish outlooks we have seen for gold of late comes from Daniel Oliver at Myrmikan Capital. Assessing what the price of gold would need to be to provide one-third backing for the Fed’s balance sheet, he comes up with a price of $11,090 per ounce and $18,150 for 54% backing (the average level maintained by the Fed from 1914 to 1933). “The Fed’s balance sheet,” he says, “is sure to grow larger, increasing those figures further. It is difficult even for gold investors to imagine these prices. Yet they are what history and math suggest are coming. … [T]he first stop of $10,000/oz is actually not that far away: investors are going to have to get used to logarithmic scales.”

We will be posting occasional afternoon updates only for the next few weeks.
Please stay tuned.