JP Morgan just trumped Goldman Sachs’ target by calling for $2500 Gold by the end of this year. Who’s going to be the next big big bank to call for even higher prices? Is there anything better than watching major institutions fighting for headlines by calling for higher targets in a particular issue? Remember we saw the same thing in $GOOG back in 2007. It felt like every day someone else called for a higher prices. Good times.
Back to Gold, I’m sure JP Morgan has a lot of different reasons for choosing the 2500 number. Or maybe they don’t. But to me, this is no arbitrary level. If JP Morgan is right, then you are talking about Gold prices not just reaching nominal all-time highs, like it’s been doing all year, but actually reaching REAL All-time highs.
Rob Griess over at TheChartStore does a great job of providing the data:
When we adjust Gold for inflation using the Consumer Price Index, we are looking at Real all-time highs for Gold around $2,466 back in 1980. Every day we hear about Gold making all-time highs. What we don’t hear is that these are just nominal new highs. If we are going to make comparisons, let’s at least compare apples to apples. You can’t compare Albert Pujols to Babe Ruth just like you can’t compare LeBron James to Bob Cousy. Same thing. Perhaps JP Morgan is coming to the same conclusion.
The bottom line here is the Gold is the oldest form of currency that we know of. All of these fiat currencies out there continue to lose value to the yellow metal. Its not just in US Dollar terms guys. Go over to The Chart Store and take a look at Gold against all of your favorite currencies. New highs all over the place, not just in Benjamins.