The higher gold goes, the harder it could fall

It’s notoriously hard to objectively value gold, and it’s plausible that the rapid ascent in gold prices could reflect a paradigm shift in demand. In fact, if gold prices were to follow the trajectory of the 1970s rallies in real terms, that would imply a peak above $8,000 per oz. But previous rallies also show that prices can fall almost as quickly as they rise. Our view is that gold prices will end this year well below current levels.