Sep 23, 2021

$3,000 Gold Is This Cycle's Peak, and It's Coming, Here's Why - David Garofalo

Gold peaked in 1981 when it reached $850 an ounce in nominal terms, but adjusted for inflation, that would equal $3,000 in real terms today.

$3,000 is this cycle’s coming peak, David Garofalo, CEO of Gold Royalty Corp. told David Lin, anchor for Kitco News.

“Gold’s all-time peak in real terms was actually achieved in 1981 when the nominal gold price was $850 an ounce, that would be $3,000 an ounce in 2021 dollars. That’s what I think I see in this cycle. The reason you want to be in the royalty companies in that kind of pronounced price [movement] versus the producers is we protect you from cost inflation,” he said.

Royalty companies, like Gold Royalty, earn income by taking a percentage of their portfolio miner companies’ top line revenue, and so are not exposed to potential margin shrinkages by means of cost inflation.