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Not sure where to ask this but here goes on the FC.

There's this article in the latest Outstanding Investor Digest that I am just so thrilled with -- a transcript of a client presentation by Arnold Van Den Berg of Century Management. He makes a lot of good points about how the US economy and stock market are pretty far out of sync, on common-sense measures as well as historical measures.

But the question here has to do with one of the charts in the article, which shows the price of gold from 1970 (before the dollar was allowed to float) to now. There is of course a giant peak in gold value to $850/oz in 1980 or so, followed by 2 years of decline to around the $400 level and ever since then it has oscillated a bit up and down.

It's currently at $426 (that's where the chart ends, I think it's end 2003) and that's a result of a runup from slightly under $300 in 2000 or 2001. So it seems like maybe it's already had a run up.

But if I take today's $426 price and run it backwards in time and include inflation I find that today's $426 price corresponds roughly to 1975's $160 price, or 1979's $180 price. This is pretty cheap! So maybe gold isn't far from its historical low since the gold standard was abandoned.

Where would be a good starting point for learning about the precious metals market and what drives it? And how to assess value, vs. price?

Does anyone else think this might be something interesting to look at?


-Mike (mklein9)
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