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From paper reserves to gold reserves

“In January of this year I published a piece on the “fair gold price” in order to demonstrate that, if one was to simply treat the gold of all international central banks as the world’s true, reserve currency – as history has held it as for over hundreds, if not thousands, of years – then a logical calculation would place the value of gold at an astonishing $10,617 an ounce. Compared to gold’s price of $1,675 back then, this was a significant revaluation.

The fair gold price can be calculated by the use of James Turk’s Gold Money Index formula:

Fair Price of Gold (per ounce) = Total Central Bank Foreign Exchange Reserves / Total Central Bank Gold Reserves

As I attempted to explain in my January piece, there is nothing surprising about the formula: it compares the gold bullion reserves of the central banks with their foreign currency reserves.

I concluded by asking what would happen to the market/spot price of gold if central banks around the world started to slowly, or quickly, divert their foreign currency reserves – over $10 trillion’s worth – into gold.”

Read the complete article at GoldMoney here.

# Here you can see WHY it’s crucial to own physical gold & silver now, and HOW you can buy [and sell] it.

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Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

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