GOLD: Talking Points

In my view, there is a very high probability gold will surpass $2000 an ounce by year-end 2013 - and it could go much higher.  Moreover, by mid-decade, the metal's price could double or even triple from recent levels. Looking backward, gold is off some $250-$260 from its September 2011 all-time high of $1924 an ounce.  This is a decline of roughly 13 percent - in line with past bull-market corrections. In the weeks ahead, much depends on institutional speculators at the big banks and hedge funds.  In the past year or so, these large-scale players have made good money trading futures, ...

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Musings on Gold

I've been following gold professionally for some 40 years, ever since joining Citibank as an international economist back in 1973.  One of my early assignments was to write a report for senior management on the future role of gold in the world monetary system.  Gold had already risen from $35 an ounce in August 1971, when President Nixon ended the U.S. dollar’s official convertibility into gold, to $120 an ounce in mid-1973 when I joined Citibank as one of the most junior economists. Though I thought the price of gold could rise, if only because its price had been suppressed and private ...

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GOLD IN AN UNCERTAIN WORLD

(Excerpts from my speech to the 7th annual CHINA GOLD & PRECIOUS METALS SUMMIT, Shanghai, China, December 5th through December 7th, 2012) Gold in recent months has been stuck in a trading range between $1675 and $1750 an ounce - disappointing many bullish investors and quite a few gold-market analysts (like myself) who had expected the yellow metal to be ending the year approaching - or even exceeding - its all-time high-water mark near $1924 recorded back in September of 2011. Recent attempts to rally higher have been thwarted by stepped-up speculative selling and softer physical ...

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U.S. Election Results: Best of All Possible Worlds for Gold

Tuesday's election outcome - with President Obama returning to the White House, the Democrats retaining a weak majority in the Senate, but without enough seats to overcome a Republican veto on important legislation, and a strong Republican majority in the House of Representatives - may be the best of all possible world's for gold investors. Just a month ago, on October 5th, gold reached an 11-month high just over $1,795 an ounce.  Since then, in the run up to yesterday's election, the yellow metal slumped as low as $1,672 - reflecting the prospects that a Romney victory might bring a reversal ...

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U.S. Monetary Policy: Good News for Gold Investors

We have long expected further monetary easing by the U.S. central bank . . . but this past Thursday's news from the Fed was more than most gold investors could have imagined or hoped for.  In reaction to persistent recession-like conditions and continued high unemployment in the U.S. economy, the Fed is now embarking on even more reflationary - and ultimately inflationary - monetary policies. In a statement following Thursday's Federal Open Market Committee (FOMC) meeting, the Fed said "If the outlook for the labor market does not improve substantially, the committee will continue its ...

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GOLD – Dark Clouds, Bright Skies

Disappointing news for the U.S. economy is good news for gold investors. Recent economic data show an economy that is "stuck in the mud," to quote Fed Chairman Ben Bernanke.  And, in response to signs of a slowing economy, the U.S. central bank is, sooner or later, likely to embark on another round of monetary easing. In fact, the recent gold-price rally that took the yellow metal back over the psychologically important $1,600 an ounce level reflects rising market expectations that the Fed will announce further economic stimulus following the July 31-August 1 Federal Open Market Committee ...

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GOLD: Waiting for the Fed

Bad news for the American and other major world economies is usually good news for gold and silver – especially when it triggers expectations of more accommodative, more reflationary, monetary policies.After all, easy money is what these precious metals thrive upon. Indeed, the near-term outlook for gold and silver is now very much dependent on U.S. monetary policies and, to a lesser extent, the unfolding European debt and currency crisis. With the U.S. Federal Reserve’s next policy-setting meeting set for June 19th/20th, the next week or so may be the last chance for investors to buy gold ...

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Gold: Treading Water in Turbulent Seas

Gold has been somewhat of a disappointment to many analysts and investors who, as of a few months ago, were still anticipating higher prices again this year.  But the year is not over, nor is gold's long-term secular bull market. With eleven years of advancing prices already chalked up on the scoreboard, the long-term secular upswing has five-to-ten years of life still ahead - and maybe more.  Along the way, expect continuing volatility, periods of consolidation, and occasional corrections, corrections sometimes so severe that some will prematurely and incorrectly call the game over. We ...

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Un-Seasonal Expectations

Despite the winding down of East Asia's Lunar New Year gold buying binge, I expect the yellow metal's price will continue to move up in the weeks ahead - but not without some struggle as gold works to reestablish upward momentum and renewed credibility. Historically, with the arrival of the Lunar New Year, gold demand and the metal's price typically enter a seasonally weak period -- but the typical seasonality is no longer a reliable guide to gold price prospects. The usually weak summer months this past year saw gold run up to new historic highs above $1,900 an ounce . . . and, contrary ...

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World Economic Trends and the Future Price of Gold

I recently had the pleasure and privilege of speaking again this year at the China Gold & Precious Metals Summit in Shanghai and to several private seminars organized by clients elsewhere across China.  Here's the text of my presentation: First My Forecast Forecasters, whether of the economy, or the stock market, or the gold price are frequently wrong . . . but we are never in doubt.  It is up to you - the investor - to listen, evaluate, doubt, and make your own decisions about gold's future price and the role the metal might play in your own investment portfolio and personal savings ...

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