Thursday, May 2, 2013

Bullish Forecast for Precious Metals

"An asset can appear overpriced while actually being good value if the currency being used to establish the price is itself losing purchasing power and overvalued. To restate this point another way, economic calculation requires sound money, which is one axiom that does remain unchanged over time. Without sound money, we will reach inaccurate conclusions about an asset’s value.

Using two mathematical formulas – my Fear Index and the Gold Money Index – I have repeatedly made the case that the US dollar is overvalued and gold and silver are good value. Since their unprecedented drop in price that began last week, I've been looking for fundamental reasons to change my analysis, and thus alter my bullish forecast for the precious metals.

Since then I still haven't found any reason to change to change my bullish outlook. Given their lower price, in my view gold and silver are simply better value than they were a week ago, and the dollar more overvalued."

- James Turk via a recent GoldMoney article: