In my opinion, Gold fair value is very easy to understand. I look at total global money supply divided by the total amount of Gold. Global money supply (M2–M3) is roughly $120–150 trillion, while total above-ground gold is about 7 billion ounces. When you do the math, $120 trillion divided by 7 billion ounces gives roughly $17,000 per ounce, and $150 trillion divided by 7 billion ounces gives roughly $21,000 per ounce. This means that, based purely on money supply expansion, gold’s fair value today lies in a range of $17,000 to $21,000 per ounce, and anything below that reflects how much fiat money has grown relative to gold.
For comparison, central banks claim they target 2% inflation on average since the gold standard was removed in 1971. If inflation had really been just 2% for over 50 years, gold would be priced around $100 per ounce today (up from $35 in 1971). But reality is very different. Official CPI shows prices have risen by roughly 700% since then, and total money supply has expanded by thousands of percent.
Gold follows the money supply ONLY. That’s why valuing gold against total money supply, not the 2% inflation narrative, gives a far more realistic framework for gold’s true fair value. In other words, totally under valued in my opinion.
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