The author argues because there is no true way to value gold it is purely a speculation. He is exactly right.
Gold has no earnings, no board of directors, and it pays no dividends. It is a lump of metal. Its value is only based on the demand in the free market, which makes it terribly difficult to determine a "fair" price for gold.
My view is that gold is money. The price of gold reflects the market's view of the current value of the paper dollars you are purchasing it with.
American dollars, and all paper currencies around the world, have no tangible value. In 1971, when president Nixon removed the world from the gold standard, governments were then able to print any quantity of money they desired. This simultaneously allowed them to spend and run any size deficit they desired.
The reason a paper dollar has no value is there is no scarcity. There is an unlimited amount of currency that can (and will) be created just by pressing a few strokes on a keyboard. It is now all done electronically.
Gold has scarcity. To extract an ounce of gold from the earth it takes years of time and labor to develop a producing mine.
The author did include a simple graph in his article, and I agree with it completely. The higher the price of gold, the more dangerous it becomes to buy in. This will be very important when we reach the mania stage of this secular bull market.
