In year 2000 the U.S. had a positive real Fed Funds Rate of nearly 3% and a U.S. Federal Government budget surplus of $236.241 billion equal to 2.31% of U.S. GDP. In March 2000, the Gold/NASDAQ Ratio bottomed at an all-time low of 0.0563.
The Gold/NASDAQ Ratio trades in 10-year+ cycles. After bottoming in March 2000 at an all-time low of 0.0563, the Gold/NASDAQ ratio rose to a high in August 2011 of 0.8066.
Today, we have a negative real Fed Funds Rate of 6.95% and a U.S. Federal Government budget deficit of $2.577 trillion equal to 10.77% of U.S. GDP. This means the Gold/NASDAQ Ratio had zero chance of returning back down to its March 2000 all-time low of 0.0563.
The Gold/NASDAQ Ratio bottomed in November 2021 at a 10-year+ low of 0.1187. During the first 20 days of 2022, the Gold/NASDAQ Ratio has gained by 8.63% to 0.127 and has surpassed its long-term key breakout point.
The average Gold/NASDAQ Ratio from March 2000 through January 2022 is 0.3029.
The NASDAQ Composite is currently 14,513. Based on the NASDAQ's current index price, a return to the average Gold/NASDAQ Ratio from March 2000 through January 2022 of 0.3029 will value gold at $4,395.99 per oz.
When NIA's President invests his own money into a gold stock, he only trusts management teams with long established track records of success. North Peak Resources (TSXV: NPR)'s management team plans to build NPR into the next Kirkland Lake Gold (KL) and Rupert Resources (TSXV: RUP).
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA's President has purchased 200,000 shares of NPR in the open market. This message is meant for informational and educational purposes only and does not provide investment advice.