An astronomical amount by any standards. Interestingly, only a small fraction of this monumental amount has been allocated to gold investments. Here below is the record of gold investments since 1980. To be sure a brief history of gold investment demand will indubitably put our analysis into sharp perspective.

In the late 1970s the price of gold soared to the then all-time high of $800/oz…fueled by runaway inflation of that period that propelled gold investments skyward.

(Source: Moore Research Center, Inc)

The price of gold soared from about $160 in 1976 to a little over $800 in early 1980. It is imperative to note that in 1980, gold investments as a percentage of Total Global Financial Assets had reached 5.0%. Hoverer, gold investment demand then began to wane for many of the following years until the new century began in 2000…when the price of gold finally bottomed. In that year gold investments as a percentage of Global Financial Assets had also bottomed at 0.19%.

(Chart Source: SRSrocco Report: https://srsroccoreport.com )

By 2001 gold investments as a percentage of Global Financial Assets began a slow methodical climb until the 2011-2012 period…when gold again make an all-time peak at over $1,900. Understandably, the price of gold then slowly began to decline in concert with the diminishing gold investments as a percentage of Global Financial Assets (which dropped from 0.85% to last year’s 0.58%. Think about it: Gold investment as a percentage of Global Financial Assets were nearly 9 Times greater in 1980 than it is today. To be sure the implications and ramifications of the above are mine-boggling. Here is another chart focus on how minuscule recent gold investment is as a percentage of Global Financial Assets:

(Chart Source: SRSrocco Report: https://srsroccoreport.com )

Gold Forecast: In the event gold investments as a percentage of Global Financial Assets again rises to 5.0%, it means 0.05 X 105,000,000,000,000 = $5.25 Trillion ($5.250,000,000,000) will flood into gold. This begs the question: What might be the impact of a tsunami of increased gold investments hitting world markets?

Here Are The Estimating Rationale

Total global gold production is estimated at about 3,000 tonnes.
3,000 tonnes is equivalent to 96,450,000 troy ounces (as there are 32,150 oz/tonne)
Value of one year’s global gold production at $1,150/oz is about $110 Billion

Consequently, in the event gold investments as a percentage of Global Financial Assets again increases from 0.58% to 5.0%, the demand might explode exponentially to $5,250,000,000,000 ($5.25 Trillion). For this reason this analyst does not dare try to predict how high the gold price will be turbocharged as a result...when this happens. 2017 looks to be a Golden Year for precious metals investors.

(Source: http://www.gold-eagle.com/article/making-case-12000-gold-and-360-silver)

By I. M. Vronsky
Editor & Partner - Gold-Eagle
www.gold-eagle.com

Founder of GOLD-EAGLE in January 1997. Vronsky has over 40 years’ experience in the international investment world, having cut his financial teeth in Wall Street as a Financial Analyst with White Weld. He believes gold and silver will soon be recognized as legal tender in all 50 US states (Utah and Arizona having already passed laws to that effect). Vronsky speaks three languages with indifference: English, Spanish and Brazilian Portuguese. His education includes university degrees in Engineering, Liberal Arts and an MBA in International Business Administration – qualifying as Phi Beta Kappa for high scholastic achievement in all three.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.