Gold has long been considered a safe haven in times of economic instability. In recent years, this precious metal has once again come under the spotlight, as financial experts and investors point to a looming bull market. With record-breaking highs and significant geopolitical and monetary changes, the gold cycle is gaining attention. This article provides an in-depth analysis of gold investment trends, drawing on insights from experts like Michael Maloney, Jim Rickards, and Peter Schiff, alongside historical precedents and economic data.
The Current State of Gold Investment
Michael Maloney, a renowned financial educator and author of Guide to Investing in Gold and Silver, believes we are at the early stages of the current gold cycle. According to Maloney, only about 20% of the cycle’s potential has been realized so far. He predicts significant purchasing power gains in the future, particularly as economic uncertainty increases.
Maloney emphasizes that gold has historically served as a refuge during times of inflation and deflation. Whenever a currency becomes unstable, people gravitate toward gold and silver to protect their purchasing power. This trend has been consistent throughout centuries, particularly during inflationary periods when the value of paper currency erodes rapidly.
While hard data on gold trends prior to the establishment of the Federal Reserve is scarce, historical records since 1913 provide valuable insights. One key observation is the relationship between gold’s value and base money—the total cash in circulation plus bank reserves at the Federal Reserve. Maloney highlights moments in history when the value of gold held at the U.S. Treasury exceeded the value of all paper currency, underscoring gold’s enduring significance.
Economic Indicators and Gold Prices
Base Money and Gold Valuation
Base money, a fundamental economic indicator, plays a crucial role in understanding gold prices. It includes cash in circulation and bank deposits at the Federal Reserve, which are redeemable in cash. Maloney’s analysis of historical data reveals key periods when gold prices adjusted to cover the total value of base money.
For example, in 1934, gold’s price rose to $35 an ounce, sufficient to cover every paper dollar in circulation. A similar trend occurred during the 1970s bull market, when gold became a free-trading commodity. By 1980, the value of gold exceeded the total base money supply, indicating a potential return to the gold standard.
The Impact of Credit Expansion
Credit expansion further complicates the relationship between gold and currency. Maloney explains that credit card transactions effectively increase the global currency supply. When a credit card receipt is signed, banks create new currency through book entries. This unpaid credit, known as outstanding revolving credit, functions similarly to base money.
In past cycles, gold prices have risen to account for both base money and outstanding credit. For instance, during the 1980 bull market, gold’s value briefly exceeded the combined total of base money and revolving credit. This historical pattern suggests that today’s unprecedented credit expansion could drive gold prices even higher.

Historical Gold Price Movements
Gold in the 20th Century
Gold’s role as a financial asset has evolved significantly over the last century. In 1934, the U.S. government revalued gold to stabilize the economy during the Great Depression. This revaluation ensured that gold’s value covered all circulating paper currency, effectively reinforcing its monetary importance.
The 1970s marked another pivotal moment. As gold became free-trading, its price surged, reflecting public demand and market dynamics. By 1980, gold reached $850 an ounce, overshooting the combined value of base money and credit. This period cemented gold’s status as a hedge against inflation and currency devaluation.
The Modern Era
The 21st century has seen similar patterns. After bottoming out at $250 an ounce in 1999, gold entered a prolonged bull market, peaking at $1,900 in 2011. This rally mirrored earlier cycles, as investors sought protection against economic uncertainty and loose monetary policies.
In recent years, gold has breached new all-time highs. Experts like Jim Rickards and Peter Schiff attribute this to a combination of factors, including record levels of money printing, near-zero interest rates, and growing skepticism about the Federal Reserve’s ability to normalize monetary policy.

Expert Predictions and Bullish Outlooks
Insights from Jim Rickards and Peter Schiff
Jim Rickards, a best-selling author and economist, has long predicted a significant rise in gold prices. He argues that the current bull market resembles previous cycles but with amplified drivers. Rickards points to a convergence of factors, including exponential money supply growth, declining confidence in fiat currencies, and geopolitical tensions.
Peter Schiff, CEO of Euro Pacific Capital, echoes these sentiments. Schiff emphasizes that the Federal Reserve’s policies have created a scenario where endless money printing and deficit spending are unavoidable. This, he contends, will lead to a devaluation of the U.S. dollar and a corresponding rise in gold prices.
Predictions for Gold’s Future
Both Rickards and Schiff forecast that gold prices will climb significantly in the coming years. Rickards has set a target of $15,000 per ounce by 2026, based on historical trends and monetary metrics. Schiff similarly envisions a sustained bull market, driven by economic realities that favor gold over fiat currencies.
The Potential for a New Gold Standard
Calculating Gold’s Value Under a Gold Standard
Rickards provides a compelling case for a potential return to the gold standard. He calculates that for gold to back the global money supply at historical levels, its price would need to rise dramatically. Using the U.S. M1 money supply of $4 trillion and the country’s official gold reserves of 8,000 tons, Rickards estimates a price of $15,265 per ounce.
Expanding this calculation to include broader money supplies, such as M2, yields even higher price targets. With an M2 supply of $15 trillion, gold’s implied price exceeds $50,000 per ounce. These figures highlight gold’s potential value as a monetary anchor in an increasingly unstable financial system.
Challenges and Implications
While a return to the gold standard is theoretically feasible, it presents significant challenges. Modern economies rely on fiat currencies for flexibility and growth. Reintroducing a gold-backed system would require substantial adjustments, including deflationary pressures and constraints on monetary policy.
Nevertheless, gold’s historical role as a stabilizing force suggests it could play a crucial part in restoring confidence in global financial systems. Even without a formal gold standard, rising gold prices reflect its enduring importance as a store of value.

Conclusion
The current gold cycle offers compelling opportunities for investors. Historical patterns, expert analyses, and economic indicators all point to a sustained bull market, with potential price targets ranging from $15,000 to $50,000 per ounce.
Gold’s value is deeply rooted in its ability to protect purchasing power and provide stability during times of economic turmoil. As central banks continue to expand money supplies and geopolitical uncertainties persist, gold remains a vital asset for preserving wealth.
For investors, the key takeaway is clear: the gold cycle has only just begun. By understanding the historical context and current drivers, investors can make informed decisions to capitalize on gold’s future potential. Whether as a hedge against inflation or a long-term store of value, gold’s place in the global economy is more relevant than ever.