Egon von Greyerz, founder of Matterhorn Asset Management and Gold Switzerland, has shared his insights, indicating potential for substantial increases in gold prices based on historical trends and current economic conditions. He explained that gold could reach up to $16,000 per ounce if it returns to its historical average relative to U.S. treasuries, and even $40,000 per ounce based on the 1979-80 levels.
Gold Prices Could Skyrocket According to Egon von Greyerz
Egon von Greyerz, founder of Matterhorn Asset Management AG and Gold Switzerland, discussed potential future values for gold in an article published on his website on Monday. He examined the potential for significant increases in the price of gold based on historical trends and current economic conditions. Von Greyerz is a notable financial analyst specializing in wealth preservation through precious metals.
The strategist suggested that if gold were to return to its historical average level relative to U.S. treasuries, it would need to be revalued by at least six times, implying a gold price of approximately $16,000 per ounce. This scenario, he underscores, reflects a substantial increase in gold’s value driven by its role as a reliable hedge against economic instability.
“The total of U.S.-held gold has on average been 40% of U.S. treasuries outstanding. Today it is only 7%,” he described, asserting:
If gold were to reach the average level it needs to be revalued 6x at least – a gold price of $16,000.
“As we enter the golden era with BRICS countries increasing their purchases continuously and central banks selling U.S. treasuries to buy gold. No country and no central bank will in future hold dollars as a reserve asset. Physical gold is the only proper reserve asset, just as it has been throughout history,” he emphasized.
Additionally, von Greyerz explores the possibility of gold reaching the levels observed during 1979-80. At that time, gold represented 140% of U.S. treasuries, and to match this ratio today, it would need to be revalued by 19 times, suggesting a gold price of over $40,000 per ounce. He highlights that this dramatic increase is based on historical precedents and the potential for gold to regain its historical significance as a primary reserve asset. The strategist described:
If gold were to reach the 1979 – 80 level of 140% gold needs to be revalued 19x to over $40,000.
Von Greyerz also mentioned that silver could move twice as fast as gold. He clarified that these price predictions are not presented as definitive forecasts but rather as possible outcomes if certain economic conditions are met. He implies that gold’s role as a hedge against financial turmoil makes it a crucial component of wealth preservation strategies, especially in times of economic uncertainty.
“Investors should not focus on potential targets for gold or silver. Instead just think of gold as financial life insurance which just as throughout history will at least preserve investors’ assets but most probably also enhance them,” he advised, concluding: “Remember to only hold physical gold and silver stored in the most secure vaults and the safest jurisdictions.”