Gold Price Forecast Per US Federal Reserve Balance Sheet

By Vronsky

Since 1999 the gold price has moved in concert with the growth in the US Federal Reserve Balance Sheet…including the recent correction in both during the past three years. Accordingly, the following objective analysis will forecast the gold price out to 2016…based solely on historical Central Bank data.

gold growth chart

The above chart estimates two Balance Sheet growth rates from 2012-2016 (when Obama leaves the Presidency):

  • Adding $40 Billion per month…equating to a Compound Annual Growth Rate (CAGR) = 14.8%
  • Adding $85 Billion per month…equating to a Compound Annual Growth Rate (CAGR) = 26.6%

 

Another Federal Reserve Assets vs. Gold Price Chart:

http://www.macrotrends.net/1448/fed-balance-sheet-vs-gold-price

Moreover, it’s noteworthy that the Balance Sheets of major international central banks have likewise been growing in tandem since the beginning of the millennium. The chart below clearly shows steady Balance Sheet increases in the Euro Central Bank, Bank of Japan, Bank of England and the US Federal Reserve.

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