Most people will tell you gold’s inflation-adjusted all-time high is around $2300. $7150 is more accurate, according to John Williams, economist and editor of Shadowstats.com. He made that claim in an interview with Bloomberg:

If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record.

He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.

John Nadler, a senior trader for metals-dealer Kitco is skeptical about the gold run. He thinks that once the Fed starts tightening, the trend will reverse:

These wild calls for several-thousand-dollar gold are typical of times when gold goes into uncharted territory

The Fed will pull the interest-rate trigger and the Obama administration will, in addition, pull the tax-hike trigger before we get into any serious inflation. Once the man on the street gets in, the gold rally is likely over

Maybe the Fed actually will tighten when the time comes. But I’ll believe it only when I see it. I think more easing will happen before any tightening does. Fed liquidity is the only thing holding this market up. It largely depends on how long our creditors are willing to buy our bonds. If the Fed could get away with 10% inflation for a while, I think they do it in a heartbeat.