FINANCE 663 – International Finance

Gold, the Golden Constant, and Déjà Vu

Campbell R. Harvey
Duke University and NBER

March 2021
 Credits
• Based on my joint research, The Golden Dilemma,
with my long-time coauthor, Claude Erb
– Paper available at: http://ssrn.com/abstract=2078535

• Along with our recent 2020 paper, Gold, the Golden

Constant, and Déjà Vu with Claude Erb and Tadas
Viskanta
– Paper available at: https://ssrn.com/abstract=3667789

Harvey: Gold 2021 2

 Buffett 2012

• What motivates most gold purchasers is their

belief that the ranks of the fearful will grow.
During the past decade that belief has proved
correct. Beyond that, the rising price has on its
own generated additional buying enthusiasm,
attracting purchasers who see the rise as
validating an investment thesis. As “bandwagon”
investors join any party, they create their own
truth – for a while.”
Harvey: Gold 2021 3
 Dalio 2012
• Gold is a very underowned asset, even though
gold has become much more popular. If you ask
any central bank, any sovereign wealth fund, any
individual what percentage of their portfolio is in
gold in relationship to financial assets, you'll find it to
be a very small percentage. It's an imprudently small
percentage, particularly at a time when we're losing
a currency regime.

Harvey: Gold 2021 4

 Goals
• Lots of stories … very little scientific research
• Is gold a reliable hedge for various “fears”?
• How should we think about the “fair price” of gold?
• What role – if any – does gold play in a well diversified
portfolio?
• Why is gold so poorly understood?

Harvey: Gold 2021 5

1. Fear of Inflation
Many reasons to fear future unexpected inflation
Fed and other central bank balance sheets have expanded aggressively:

Fed balance sheet:

$7.2 trillion
October 2020

Harvey: Gold 2021 6

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
1. Fear of Inflation
Five-Year Average Gold Returns and Inflation

40%
Gold Return Inflation Rate Real Gold Return
Rolling 5-Year Annualized Return

30%

20%

10%

0%

-10%

-20%
Gold is an unreliable inflation
-30% hedge underperforming for decades

Source: Bloomberg data (tickers: GC1 Comdty, CPI INDX Index). January 1975 to July 2020
Harvey: Gold 2021 7
 1. Fear of Inflation
6%
Unexpected
Inflation 1979

4%
Data from 1975 (Annual)

2%

0%
-100% -50% 0% 50% 100% 150% 200%
Gold Price Change

-2%

-4%

-6%
Harvey: Gold 2021 9
Data source: Bloomberg, U.S. Bureau of Labor Statistics.
1. Fear of Inflation

Harvey: Gold 2021 10

1. Fear of Inflation
Inflation-Adjusted (Real) Price of Gold
10 January 1980
August 2011
9 Stagflation September 2020
GFC
Coronavirus
8
7
6 Historical average real price =
5 ‘The Golden Constant”
4
3
2
1 Real price of gold (=gold price/CPI level) Gold ETF launched
0

Real price of gold is the nominal price divided by U.S. CPI level. “The Golden Constant” is a term introduced by Jastram (1978) suggesting that the long-term
real return on gold is zero (gold retains its value) and, hence, real price is constant.
Source: Bloomberg data (tickers: GC1 Comdty, CPI INDX Index).
Harvey: Gold 2021 11
1. Fear of Inflation

Harvey: Gold 2021 12

 1. Fear of Inflation
9

Gold/CPI
8

1975-2020
5 1791-2020 average=3.7
average
4

3 1820-1856
average
2
1937-1973
average
1

Harvey: Gold 2021 13

Data source: Economic History (www.eh.net)
 1. Fear of Inflation

*Army Captain with six years of experience.

Roman salaries from time of Emperor Augustus, 27BC-AD14
Centurion Pay=3,750 Denarii; 1 (gold) Aureus=25 Denarii;
Aureus=7.85 grams (24ct); 31.103 grams/toz

Harvey: Gold 2021 14

https://www.federalpay.org/military/army/captain
1. Fear of Inflation
Bottom Line
• Not effective short-term hedge of unexpected inflation
• Not effective long-term (10-year) hedge
• May be effective over very, very long-term
• May be effective in hyperinflationary situation -- assuming real price of
gold stable

Harvey: Gold 2021 15

 1. Fear of Inflation
The Nominal Price of Gold in 10 Years Under Different Inflation Rates
and Assumptions for the Future Real Price of Gold

Note: Our baseline assumptions are Gold=$2,000; Breakeven inflation=1.56% (column Harvey: highlighted);
Gold 2021 U.S. CPI level = 257.21. This implies an inflation-adjusted price of 16
gold of
$7.8 (row highlighted). While not reported, if inflation is zero over the next 10 years and the real price of remains at $7.8, then the future nominal gold price would be $2,000.
2. Fear of Currency Depreciation
Two ways to think of currency hedge
1. If I hold gold, it protects me against unexpected currency
fluctuations
• For example, if dollar depreciates by 10% against the yen and gold increases
by 10%, I am protected

2. If I hold gold, it protects me against currency debasement

(will return to this)
• Could be slow debasement or large (massive printing), e.g. large gold demand in
the Confederate States of America

Harvey: Gold 2021 17

 2. Fear of Currency Depreciation
3.50

Should be straight line if gold is

Local Currency Price Gold/Local Inflation Index

3.00

2.50
a good inflation hedge
Australian Dollar
Canadian Dollar
2.00
Deutsche Mark
Japanese Yen
1.50
New Zealand Dollar
Swiss Franc
1.00
British Pound
US Dollar
0.50

0.00

Data sources: IMF, Bloomberg. All times series normalized to an initial value of 1.0.

Harvey: Gold 2021 18

 3. Is Gold like a Bond?
• Perhaps the same people buying gold at $1,900 were also locking
in -2% 10-year real yields
• Another possible fear trade: rates are low that is bad news for the
economy and gold may be attractive to some

Harvey: Gold 2021 19

3. Is Gold like a Bond?
Sept. 6, 2013.
Non-Farm Payrolls
Announcement:
Unemployment rate drops
to 7.3% (lowest in 5 years).
Consistent with the Federal
Reserve (September 18)
potentially reducing QE.
Yields up -- Gold down

Harvey: Gold 2021 20

Data source: Bloomberg
3. Is Gold like a Bond?
Sept. 18, 2013.
FOMC No Taper
Announcement:
Federal Reserve to
continue bond buying
(QE) program.
Yields down -- Gold
up

Harvey: Gold 2021 21

Data source: Bloomberg
3. Is Gold like a Bond?
Oct. 15, 2014.
Dramatic drop in intraday T-
bond yield (Treasury flash
crash): yields down -- Gold
up

Harvey: Gold 2021 22

Data source: Reuters
 1 Second US10YT=RR 12:07:04 AM 11/6/2015 - 10:12:55 AM 11/6/2015 (EST)

3. Is Gold like a Bond?

Line, US10YT=RR, Bid Yield(Last), 10:12:55 AM 11/6/2015, 2.3307 Yield
2.34

2.3307
2.33

2.32

Nov. 6, 2015. 2.31

2.3

Unexpected 100,000 increase in NFPs 2.29

2.28

Increase probability of December 2.27

2.26

Fed tightening. Rates up-Gold down. 2.25

2.24

2.23
Auto
00:43 01:43 02:43 03:43 04:43 05:43 06:43 07:43 08:43 09:43
November 06 2015

1 Second XAU= 12:03:51 AM 11/6/2015 - 10:13:17 AM 11/6/2015 (EST)

Price
USD
Ozs

1,106

1,104
1,102

1,100
Line, XAU=, Bid(Last)
10:13:17 AM 11/6/2015, 1,088.3100, N/A, N/A 1,098

1,096

1,094

1,092

1,090
1,088.3100
1,088

1,086
Auto
00:50 01:50 02:50 03:50 04:50 05:50 06:50 07:50 08:50 09:50
November 06 2015
Harvey: Gold 2021 23
Data source: Reuters
3. Is Gold like a Bond? Tick XAU=

Line, XAU=, Bid(Last)

6:33:12 PM 2/8/2016, 1,197.4100, N/A, N/A
11:01:46 PM 2/7/2016 - 6:40:29 PM 2/8/2016 (GMT)
Price
USD
1,197.4100
Ozs
1,196
1,194

February 7, 2016.
1,192

1,190

1,188

Rates fall – gold rises. 1,186

1,184

1,182

1,180

1,178

1,176

1,174

1,172

1,170

1,168

1,166

1,164
Auto
23:01 23:50 00:50 01:50 04:50 07:50 08:53 09:50 10:50 11:50 12:50 13:50 14:50 15:50 16:50 17:50 18:34
Feb 07 16 February 08 2016

Tick US10YT=RR 7:43:17 PM 2/7/2016 - 1:39:24 PM 2/8/2016 (EST)

Line, US10YT=RR, Bid Yield(Last), 1:32:57 PM 2/8/2016, 1.7534 Yield

1.87

1.86

1.85

1.84

1.83

1.82

1.81

1.8

1.79

1.78

1.77

1.76
1.7534
1.75

1.74

Harvey: Gold 202119:43 23:45 02:14 03:43 04:16 04:57 05:30 06:15 07:45 08:22 08:54 09:29 09:54 10:18 10:49 11:44 12:29 13:18 13:37
Auto
24
Feb 07 16 February 08 2016
Data source: Reuters
 1 Minute XAU= 9:51 PM 2/13/2017 - 6:18 PM 2/14/2017 (GMT)
Price
BarOHLC, XAU=, Bid

3. Is Gold like a Bond?

USD
5:17 PM 2/14/2017, 1,223.0900, 1,223.6700, 1,223.0900, 1,223.6400, -1.5200, (-0.12%)
Ozs

1,233

1,232

1,231

1,230

February 14, 2017.

1,229

1,228

• Yellen tells Congress that rate hike in

1,227

1,226

1,225

March is still possible. Rates rise – 1,224

1,223.6400
1,223

gold falls. 22:51 23:51 00:51 01:51 02:51 03:51 04:51 05:51 06:51 07:51 08:51 09:51 10:51 11:51 12:51 13:51 14:51 15:51 16:51 17:51
1,222

Auto

Feb 13 17 February 14 2017

1 Minute US10YT=RR 7:44 PM 2/13/2017 - 1:06 PM 2/14/2017 (EST)

Line, US10YT=RR, Bid Yield(Last), 12:14 PM 2/14/2017, 2.4950 Yield
2.505
2.5

2.4950
2.495

2.49

2.485

2.48

2.475

2.47

2.465

2.46

2.455

2.45

2.445

2.44

2.435

2.43

Auto
19:44 20:44 21:44 22:44 23:44 00:44 01:44 02:44 03:44 04:44 05:44 06:44 07:44 08:44 09:44 10:44 11:44 12:44
February 13 2017 February 14 2017

Harvey: Gold 2021 25

Data source: Reuters
 30 Minutes XAU= 10:00 PM 3/19/2020 - 9:30 PM 3/23/2020 (GMT)
Line, XAU=, Bid(Last) Price
7:30 PM 11/2/2020, 1,892.3500, +14.4000, (+0.77%) USD
Ozs

3. Is Gold like a Bond? 1,540

1,530

1,520

March 19-23, 2020. 1,510

• COVID-19, Fed meeting

1,500

1,490

1,480

1,470
Auto
22:00 02:00 06:00 10:00 14:00 18:00 22:00 02:00 06:00 10:00 14:00 18:00
March 20 2020 March 23 2020

30 Minutes US10YT=RR 5:30 PM 3/19/2020 - 5:30 PM 3/23/2020 (EST)

Line, US10YT=RR, Bid Yield(Last) Yield
2:30 PM 11/2/2020, 0.8400 1.15

1.1

1.05

0.95

0.9

0.85
0.8400

0.8

0.75
Auto
20:00 00:00 04:00 08:00 12:00 16:00 00:00 04:00 08:00 12:00 16:00
Mar 19 20 March 20 2020 Mar 22 20 March 23 2020

Harvey: Gold 2021 26

Data source: Reuters
 30 Minutes XAU= 10:00 PM 3/1/2020 - 9:30 PM 3/31/2020 (GMT)
Price
Line, XAU=, Bid(Last)
7:30 PM 11/2/2020, 1,892.7469, +14.7969, (+0.79%) USD
Ozs

3. Is Gold like a Bond? 1,650

1,620

1,590

March 2020 1,560

• Not as clean as other episodes 1,530

• In March, rates drop, stocks

1,500

1,470

plummet and gold loses 01 03 04 05 06 08 10 11 12 13 15 17 18 19 20 22 24 25 26 27 29 31

Auto

March 2020

30 Minutes US10YT=RR 8:00 PM 3/1/2020 - 8:00 PM 3/31/2020 (EST)

Line, US10YT=RR, Bid Yield(Last) Yield
2:30 PM 11/2/2020, 0.8400
1.2

1.1

0.9
0.8400
0.8

0.7

0.6

0.5

0.4
Auto
01 03 04 05 06 08 10 11 12 13 15 17 18 19 20 22 24 25 26 27 29 31
March 2020

Harvey: Gold 2021 27

Data source: Reuters
 1 Minute XAU= 7:18 PM 10/26/2020 - 1:37 AM 11/3/2020 (GMT)
Price
Line, XAU=, Bid(Last)
7:18 PM 11/2/2020, 1,893.0200, +15.0700, (+0.80%) USD
Ozs

3. Is Gold like a Bond? 1,900

1,895
1,893.0200
1,890

Fall 2020
1,885

1,880

• Correlation appears to be flipping sign 1,875

1,870

1,865

Auto
21:51 09:51 21:51 09:51 21:51 09:51 21:51 09:51 21:51 09:51 21:51
Oct 27 20 Oct 28 20 Oct 29 20 Oct 30 20 Nov 02 20

1 Minute US10YT=RR 3:18 PM 10/26/2020 - 10:12 PM 11/2/2020 (EST)

Line, US10YT=RR, Bid Yield(Last) Yield
2:18 PM 11/2/2020, 0.8417 0.87
0.86
0.85
0.8417
0.84
0.83
0.82
0.81
0.8
0.79
0.78
0.77
0.76
0.75
Auto
19:44 03:44 11:44 03:44 11:44 03:44 11:44 03:44 11:44 03:44 11:44
Oct 27 20 Oct 28 20 Oct 29 20 Oct 30 20 Nov 02 20

Harvey: Gold 2021 28

Data source: Reuters
3. Is Gold like a Bond?
Real Gold Prices and Real Yields,
November 2004-July 2020
9

7 Real Gold Price = 6.1 - 129.6 x (10-Year Real Yield)

R² = 0.71
6
Real Gold Price

3 The real gold price appears to

be negatively correlated with
2 real yields over the past 15 years
1

0
-1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%
10-Year Treasury Real Yield
Source: Bloomberg data (tickers: GTII10 Govt, GC1 Comdty, CPI INDX Index)

Harvey: Gold 2021 29

3. Is Gold like a Bond?
Beware of
history ….

Data source: Bloomberg Harvey: Gold 2021 30

3. Is Gold like a Bond?
Beware of
history ….

Data source: Bloomberg Harvey: Gold 2021 31

3. Is Gold like a Bond?
If you live by the sword, you die by the sword…
• If you believe that gold will act like a bond, then a return to 4% interest
rates means sub $1,000 gold

Harvey: Gold 2021 32

4. Is Gold a Safe Haven?

The Hoxne Hoard

Source: http://www.britishmuseum.org/explore/highlights/highlight_objects/pe_prb/t/the_hoxne_hoard.aspx

Harvey: Gold 2021 33

4. Is Gold a Safe Haven?

The Hoxne Hoard “Un-Safe Haven”

Source: http://www.britishmuseum.org/explore/highlights/highlight_objects/pe_prb/t/the_hoxne_hoard.aspx

Harvey: Gold 2021 34

4. Is Gold a Safe Haven?

"When Timur sacked Aleppo and Damascus in 1400,

it didn't help to have your savings in gold.
You lost your life and your gold."

Marc Faber (2009)

Harvey: Gold 2021 35

 4. Is Gold a Safe Haven?
36.60%

2st Quadrant 1nd Quadrant

26.60%
20% of observations 31% of observations
Gold Monthly Total Return

16.60%
(from January 1975)

6.60%

-3.40%

-13.40%
4th Quadrant
-23.40% 3rd Quadrant 32% of observations
Not A Safe Haven:
-33.40% 17% of observations
-25.00% -20.00% -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00%
S&P 500 Monthly Total Return
(from January 1975)

Data sources: Bloomberg and Ibbotson Associates

If S&P<-10%,
Harvey: Gold 2021 Gold -7% return 36
 4. Is Gold a Safe Haven?
Gold “stash” hard to move around
How Many Pounds Does That Weigh?

Price of Gold

$1,200 $1,400 $1,600 $1,800 $2,000

$1,000,000 57 49 43 38 34
$2,000,000 114 98 86 76 69
$3,000,000 172 147 129 114 103
$4,000,000 229 196 172 153 137
Dollar $5,000,000 286 245 215 191 172
Amount $6,000,000 343 294 257 229 206
$7,000,000 401 343 300 267 240
$8,000,000 458 392 343 305 275
$9,000,000 515 441 386 343 309
$10,000,000 572 490 429 381 343
Harvey: Gold 2021 37
4. Is Gold a Safe Haven?
For Brazil 1980-2000, the real price of gold fell by -70%.
Annualized
2000/1980 Growth
1980 2000 Ratio Rate
Cruzeiro/USD 65.50 5,362,500,000,000.00 81,870,229,007.63 251.28%
Gold (USD) 589.75 272.25 0.46 -3.79%
Gold (Cruzeiro) 38,628.63 1,459,940,625,000,000.00 37,794,268,499.07 237.96%
Inflation Index (IMF) 86.50 11,092,888,909,767.90 128,238,525,233.73 259.25%
Real Price Ratio 446.56 131.61 0.29 -5.93%

But -70% is better than -100% (holding local currency).

Harvey: Gold 2021 38
4. Is Gold a Safe Haven?
VIX, the Traditional “Index of Fear”
9

5
Gold/CPI

0
0 10 20 30 40 50 60 70
VIX

No correlation, with real or nominal price of gold.

Harvey: Gold 2021 39
4. Is Gold a Safe Haven?
The Policy Uncertainty Index: The New Fear Index
$9

$8

$7

$6
y = 0.0313x - 0.1668
R² = 0.444
$5
Gold/CPI

$4

$3

$2

$1

$0
0 50 100 150 200 250 300
Policy Uncertainty Index

Strong correlation, 0.66 with real or nominal gold

Harvey: Gold 2021 40
5. Supply and Demand
Supply
• 187,200 metric tons mined since start of civilization (October 2020)
• Entire world stock would be a 28 meter cube
• USGS estimates 57,000 mts “proven” still in ground – so 77% of known
potential has already been mined

http://www.gold.org/about_gold/story_of_gold/numbers_and_facts/
https://www.gold.org/about-gold/gold-facts
https://www.usgs.gov/faqs/how-much-gold-has-been-found-world?qt-news_science_products=0#qt-news_science_products

Harvey: Gold 2021 41

5. Supply and Demand
Supply
• About 3,000 mts mined every year
• 80% of world supply mined since 1900 (1.5% increase per year)
• Given USGS estimates of remaining known gold, about 20 years supply.

Harvey: Gold 2021 42

5. Supply and Demand
Annual Global Mine Production and the Total Supply of Gold
250,000 3,500
Total Number of Tons of Gold World Production in Tons

World Production of Gold in Tons

3,000
Total Supply of Gold in Tons

200,000
2,500

150,000
2,000

1,500
100,000

1,000
50,000 244,000 tons
(187,200 metric tonnes) 500

USGS as of 2019
0 0

Data source: U.S. Geological Service and World Gold Council Harvey: Gold 2021 43
https://www.usgs.gov/centers/nmic/gold-statistics-and-information
5. Supply and Demand
100,000 Sectoral Gold Holdings, 2019
Estimated Above Ground Stocks of Gold 90,000

80,000

70,000

60,000 Includes ETFs

(Metric Tons)

50,000

40,000

30,000

20,000

10,000

0
Jewelry Central Banks Private Fabrication and
Investment other
Data source: World Gold Council, http://www.gold.org/investment/why_how_and_where/why_invest/demand_and_supply/
Harvey: Gold 2021 44
5. Supply and Demand
3,500

Demand (Metric Tons) 3,000

2,500

Jewelry Demand
2,000

1,500

1,000 Investment Demand

500

Technology Demand
0
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800
Price of Gold
Data sources: World Gold Council, Bloomberg.

Harvey: Gold 2021 45

 5. Supply and Demand

Russia
China

Data source: World Gold Council

http://www.gold.org/statistics#reserves-statistics Harvey: Gold 2021 46
5. Supply and Demand
Chinese FX Reserves in Tons of Gold
$4,500 120,000
China FX Reserves Reserves in Tons of Gold
$4,000

(Denominated in Tons of Gold)

100,000
$3,500 If China used FX
Reserves to buy
Chinese FX Reserves

Chinese FX Reserves
$3,000 80,000
gold they would take
($ in Billions)

$2,500 1/3 of world supply

60,000
$2,000

$1,500 40,000

$1,000
20,000
$500

$0 0

Note: 32,150.75 troy oz

Data sources: Bloomberg Harvey: Gold 2021 in metric tonne 47
5. Supply and Demand
Official gold holdings peaked at
25,000
about 20,000 metric tons following
Roosevelt’s Executive Order 6102
outlawing private ownership of gold
20,000
Official U.S. Gold Holdings

15,000
(Metric Tons)

10,000
8.173 MT
Official U.S. gold holdings October 2020
5,000
declined during Eisenhower
until 1971, when Nixon took
U.S. off the gold standard.
0

Data source: World Gold Council

Harvey: Gold 2021 48
 5. Supply and Demand
9,000
Central Bank Gold Reserves, October 2020
8,000

7,000
Central Bank Gold Reserves

6,000
(Metric Tons)

5,000

4,000

3,000

2,000

1,000

Harvey: Gold 2021

Data source: World Gold Council http://www.gold.org/statistics#reserves-statistics 49

 5. Supply and Demand
Change In Gold Reserves March 2010 to June 2020
2,000

1,500
Change in Gold Reserves
(Metric Tons)

1,000

500

-500

Excludes countries where |change|<10 mt (excluding USA)

Harvey: Gold 2021 50
Data source: World Gold Council (Quarterly Gold and FX Reserves 4Q 2011)
 5. Supply and Demand
Change In Gold Reserves March 2000 to June 2020
2,500

2,000

1,500
Change in Gold Reserves

1,000
(Metric Tons)

500

-500

-1,000

-1,500

-2,000

Excludes countries where |change|<10 mt (excluding USA)

Harvey: Gold 2021 51
Data source: World Gold Council (Quarterly Gold and FX Reserves 4Q 2011)
 5. Supply and Demand
BRIC Central Bank Gold Reserves

Data sources: World Gold Council, International Monetary Fund and Bloomberg
http://data.worldbank.org/indicator/NY.GDP.MKTP.CD/countries?display=default

Harvey: Gold 2021 52

5. Supply and Demand
Troy Ounce Holdings of Top Two Gold ETFs and the Real Price of Gold,
November 2004-July 2020
9

8
Top two gold ETF gold
7 holdings are highly
6 correlated with the real
Real Gold Price

price of gold
5

4
Real Price of Gold = 1.55 + 0.109 x (ETF Gold holdings)
3 R² = 0.89
2

0
0 10 20 30 40 50 60
GLD and IAU Gold Holdings in Millions of Troy Ounces
Source: Bloomberg data (tickers: GDTRAUOZ Index, ISHGOLD Index, GC1 Comdty, CPI INDX Index)

Harvey: Gold 2021 53

 5. Supply and Demand
GLD holdings have decreased

Gold $2020 in
August 2020
Gold $1680 in
March 2021

Harvey: Gold 2021 54

6. Gold in Asset Allocation

Data sources: Bloomberg, Barclays

Harvey: Gold 2021 55
Conclusions
1) If you fear a burst of inflation, gold will be an unreliable hedge.
Gold is too volatile.
2) Gold appears to hold its value over the long-term, i.e.,
centuries.
3) If you believe the real price of gold is constant, the gold price
should be $945.
4) Gold currently acting like a bond. If it continues to and interest
rates go to 4%, the price of gold would drop below $1,000.
5) Maybe gold could offer protection against a worldwide disaster
– but who knows, it has never been tested.
Harvey: Gold 2021 56
Conclusions
6) Given limited production, emerging markets could exert a
substantial upward pressure on price. Supposedly, Indians
have hoarded 20,000 mts.
7) Strong positive relation with ETF holding.
8) Gold has a role in a diversified commodity portfolio.
9) If all investors held gold in terms of its weight in “market
portfolio”, substantial upward pressure on price
10) Beware of technological change
Harvey: Gold 2021 57
Conclusions

• Near-earth asteroid Eros might have 125,000 mts of gold

(Science, 2009)
Harvey: Gold 2021 58
Asterank.com

Harvey: Gold 2021 59

https://asteroidminingcorporation.co.uk/

https://www.consensys.space/

https://www.transastracorp.com/

Harvey: Gold 2021 60

Harvey: Gold 2021 61
Conclusions
• Fritz Haber, Nobel Prize, Chemistry
1918
• Proposed paying Germany’s WWI
reparations by extracting gold
from ocean water
• Gold in ocean is 6 parts per trillion or 6 kg for 1 km3
• Oceans = 1.37 billion km3
• Gold in oceans = 8.22 million metric tons
• Value = $500 trillion at $1,900 per troy oz
Harvey: Gold 2021 62