Socgen is out with a research note this evening with trading ideas if Bernanke announces a new QE program at tomorrow’s FOMC meeting. The banks number one idea is long gold. (That also happens to be the number one macro trading idea of TheInvestingOracle site and has been since 2008).
Socgen sees Gold closing the gap with the monetary base (see chart below) increases since 2007. If that happens, it sees the price of gold at $1900/oz. Lastly, if gold catches up to the monetary base from the 1920’s we are looking at…drum roll please….. $8500/oz.