Gold Has No P/E Ratio. So How Do You Tell If It Is Expensive? - TradingKey

AI desk brief

Gold has fallen 26% from its January peak to about $4,160/oz, but the article argues it remains historically expensive on an inflation-adjusted basis. Using the “golden constant” framework, the author says today’s real gold price is about 12.4 versus a long-run average near 3.46, implying modest future real returns unless inflation or central-bank buying accelerates.

The piece says the yardstick has worked better over long horizons than in the short run: expensive starting points such as 1980 and 2011 were followed by weak real returns, while the deeply discounted 2001 level preceded a major bull run. It also notes that higher prices can eventually pull in more supply, citing Metals Focus expectations for global mine output to rise 2.4% in 2026 to a record 3,907 tonnes.