The precious metal markets
On a euro basis, the gold price declines at a somewhat lighter dollar (current price 48,756 euros / kg, previous day 48,951 euros / kg). On July 18, 2011, the gold price exceeded the provisional target of $ 1,600 / oz after a ten-year boom and was thus fairly valued again for the first time in over 20 years. Due to price increases and the expansion of the loan volume, the fair value for the gold price has meanwhile increased to $ 1,800 / oz. With the ongoing volatile development on the financial markets, a price range between $ 1,700 and $ 1,900 / oz is justified according to today’s purchasing power.
Gold remains undervalued
Below $ 1,700 / oz, the gold price remains undervalued, above $ 1,900 / oz (based on current purchasing power) a relative overvaluation begins. With gold prices above $ 1,800 / oz, many gold producers can grow profitably and increase gold production overall in the longer term. With gold prices below $ 1,700 / oz, gold production will decrease in the medium term. Due to the lack of alternative investments, it is advisable to remain fully invested in gold, silver and precious metal stocks even at the beginning of an expected exaggeration phase.