Is Gold Undervalued?
Long time readers know that we like to keep our pulse on the gold and silver markets, and after a few weeks of posting informational content to educate our readers about the finer points of gold investing, it’s time to dig into where we stand today, in September of 2022, in terms of the actual price of gold.
I read an article by Neils Christensen, who posts for Kitco, which we talk about in depth on this page. He feels that gold is undervalued, and in today’s summary, I’ll share with you why he feels this way.
Also, it’s worth reading just exactly how much does a gold bar weigh if you haven’t already.
The top way to safeguard your retirement is to open a precious metals IRA. Check out the below providers and request a free kit.
Best Overall Rating (Where I Invested)
#2 American Hartford Gold
Best Buyback Program
#3 Augusta Precious Metals
Most Educational ($50,000 Minimum)
#4 Red Rock Secured
Lowest Minimum Investment
#5 Noble Gold
Best Metals Selection
Is Gold Undervalued at $1,750 an Ounce?
The article highlights an interview with Huw Roberts, who is the head of analytics at Quant Insight. He spoke on behalf of the company to share that their research determined that gold has fallen below the fair market value.
The report continued by saying that the constantly rising interest rates coupled with a strong U.S. dollar SHOULD have gold priced around $1,760 an ounce. However, that’s simply not the case. Gold is trading around 2% lower than it’s fair market value, and the thought is that many people are holding out for a better entry price.
As interest rates continue to be driven up by the Federal Reserve, he added that gold can definitely go lower.
“You can’t argue that throughout 2022 the Federal Reserve has been consistent that inflation has become their number one priority and the combat inflation they need to tighten financial conditions,”
While the times remain a challenge for the precious metal, there is still a lot of potential. He went on to say that in July, the markets reacted in a way that hinted a U.S. central bank pivot on it’s monetary policy, but instead of that happening, Powell’s comments crushed that from happening. It’s also stated that markets have a 76% shot at a 75 basis point move at a later point this month.
“Gold investors got excited about a dovish pivot, and those expectations haven’t gone away; they have just been pushed back to the second half of 2023,”
A lot can happen in the next six months, however. We’ll have to see where things flush out with inflation and rate hikes, not to mention the upcoming mid-terms. However, one thing is certain at this point, gold is undervalued and can STILL get cheaper.
Timing any market can be extremely difficult. If you want to speak with someone about investing in gold for your retirement, visit this page to see our top rated gold IRA companies. They can help put your years of savings to use into a precious metals investment that will diversify your portfolio.