Monday, August 1, 2011

Gold price and US debt

As the debt limit and debt have gone up, so has the price of gold.  When the debt doubled gold went up by about a factor of 4.   They are raising the debt limit by $2.4 trillion from $14.3 trillion, or about 17%. So one reasonable guess is that gold will go up by 1.17^2 or 1.3689.   So from $1,650 that would get to $2,259.