Is Gold Overvalued?

Gold is currently trading at around $1040 per ounce, meaning a mere three gold coins will get you a decent used car. Only one gold coin will get you a shiny new state of the art PC, and just 100 ounces of gold will get you a nice house in the suburbs (depending of course where you live). So is it too far fetched to say that gold is overvalued?

The rate of gold production is much different than that of oil, as it has been increasing steadily for the past 100 years while some experts warn of ‘peak oil’, or the soon to be realized time of worldwide peak oil production and the eventual inevitable decline in oil production.

One can also look at the US gold production and notice a sharp increase and contrast this with the decrease in production of oil.

US Oil Production

Resources:

Recent Gold Production

http://minerals.usgs.gov/ds/2005/140/

Historical Gold Production

US Census Bureau (1960) Historical Statistics of the United States, p.371.