The previous peak in gold occurred back about 1980 at $900 US per oz. This was the end of that bull run in gold that began about 10 years earlier from a base of about US$35 oz.
The current bull run up for gold began from a double bottom formed between about 1999 and 2001 at about US$270 an ounce. A number of commentators have argued for some time that the world financial dynamics this time around indicate a much greater fall than the 80s, with some saying that some parts of the world, particularly the US, due to its massive public and private debt, will be hit harder than the 1929 into the 30s crash.
So if things are going to pan out this way, and it's looking more likely every day of late, then that jump in gold from $35 to $900, a ratio of about 25 to 1, would indicate that gold could at least run up to to US$6,750 an ounce. However if the US dollar becomes worthless as did some currencies during the great depression then a gold price in that region would be no big deal.
I am not an economist but can only follow the advice of others, who I think, know what they are talking about. However if things get that bad in the US I cannot help but also believe that we in Australia will not come out unscathed. So as insurance I am into physical bullion, some gold stocks, but ever ready to pull out for that fall. When it has happened big time in the past, some of the falls decimated portfolios.
In fact I see the current market a bit like Telstra 2, if you look back on the charts, you can see where the smart money got out, and many, including myself, got caught big time. A lesson well learned though.
Just my two Bob's worth on a Thursday. Would be good to hear from an economist from earlier times.