Is Gold’s 13 Year Run Almost Over? (+2K Views)

Lorimer Wilson December 11, 2012 Comments Off on Is Gold’s 13 Year Run Almost Over? (+2K Views) 2,881 Views

[While] the price of gold has gone up for 12 straight years, and is on pace to make it 13 when this year comes to a close, it seems that despite all of the gold bugs calling for the metal to surge to unbelievable highs, major financial institutions are calling for the gold bubble to finally burst in the coming months. [Let’s examine what they and others have to say.] Words: 450

So says Jared Cummans (http://commodityhq.com) in edited excerpts from his original article* entitled Gold’s 12 Year Run May Finally Be Over.

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have further edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

The Anti-Gold Sentiment

Being bearish on gold in the last decade has probably left you with your tail between your legs, as it has been one of the best performing assets out there. Its safe haven appeal and ability to keep pace with inflation has made it a staple product in many portfolios, but some of the biggest names on Wall Street are calling for the metal to finally endure a contraction:

Citigroup has called for gold to experience mild gains in 2013 to average about $1,750/oz, but sees it falling in 2014.
Goldman Sachs is calling for the average gold price to take a hit in 2014.
BNP Paribas recently cut its outlook for gold in the next two years, and similarly agrees that the precious metal will rise in 2013, only to pull back in 2014 as the bubble finally gives way.

Most of the forecasts cite a stronger U.S. economy in the coming years, as we finally work our way out of the 2008 recession. Goldman specifically pointed out that the shale gas revolution will mean that crude oil can no longer hinder global growth and that global economies will be able to move swiftly forward. The IMF predicted the global economy to grow 3.6% in the coming year; a jump from 2012′s 3.3%.

What About Inflation?

The above forecasts all seem to call for a similar move in gold, citing global growth and a higher risk appetite in the investing world but what about the prospect of inflation?

With money printing and stimulus packages in place in a number of different countries, it seems likely that inflation will have to pick up at some point in the near future, and some argue that it already has. Even if the global economy finds its footing, rising inflation has the potential to put gold back on the bull path. Then again, a strong economy with curbed inflation will almost certainly put pressure on gold prices.

The only question left is which phenomenon will be more prominent: inflation or global economic growth.

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*http://commodityhq.com/2012/golds-12-year-run-may-finally-be-over/ (For more gold news and analysis subscribe to our free newsletter).

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