During 2011 into 2013 I kept a record of those individuals who expected gold to rise substantially in the coming years and presented updated summaries in a number of articles (see links below). Below are additional or recently updated forecasts by 11 prognosticators whose projections are surprisingly consistent, on average, with previous such estimates.
The information below, compiled by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), consists of edited excerpts from a host of articles* containing additional and updated forecasts by a number of prominent analysts:
2011 & 2012 were heady times and there was no shortage of prognosticators (I stopped recording their names after I had reached 161!). That being said, the consensus of 51 analysts who provided date specific forecasts was that gold would go to somewhere between $5,500 and $6,500 by late 2014/early 2015.
1. Sprott Asset Management’s Charles Oliver: $5,000+
2. Jim Rickards: $7-9,000
“Gold…is technically set up for a massive rally…Fundamentally my target price for gold is in the range of $7,000 to $9,000 per ounce. That’s not something that will happen straight away, but it’s not a 10-year forecast either. It’s a three- to five-year forecast, for the price to rise by about five to six times. My analysis is based on a collapse of confidence in the dollar and other forms of paper money.
The target price is based on supporting the paper money supply with gold. That would be using M1 (paper notes, coins, and checking accounts) as the monetary base, with a 40 percent backing…It wouldn’t mean gold would be worth any more (in real terms), it would just mean the dollar has collapsed. But yes, you get more dollars for the ounce.”
3. Nick Barisheff, CEO of Bullion Management Group Inc., a precious metals investment firm based in Markham: $10,000
“Since there is no political will to curtail debt increases or introduce austerity measures” he argues that because “gold and U.S. government debt have shared a lock-step relationship since 2001, even though their paths diverged in 2013 due to naked short selling of gold futures contracts, that the duo will return to the same upward trajectory this year surpassing $1,800 and likely setting new highs in 2014… and remaining on track for $10,000 an ounce by 2020.”
4. Peter Krauth of MoneyMorning.com: $2,500 – $5,000
“Gold will hit $2,500 within 12 months [by the end of 2014]…breakeven costs continue to rise among gold producers, meaning the price floor keeps rising. That’s why I expect gold prices to set an all-time record price in the coming years.
Signs the yellow metal’s bull market will soon end are scarce…Every bull market in gold has three stages: Stage One: Currency Devaluation; Stage Two: Investment Demand; Stage Three: A culminating Mania-Buying Spree…[and] at the moment we are nearing the end of stage two which means the mania stage isn’t far behind…As the mania sets in and higher prices, by themselves, beget higher prices, with gold now rising in the kind of near-vertical climb that is the hallmark of a speculative mania – a bubble forms. This is where a $5,000 price point could even be reached….Despite the fact that we’ve been in a powerful gold bull market for more than a decade already, the best is yet to come for gold prices. The mathematical result is almost guaranteed: Gold will increase in price dramatically to reflect its true value.”
5. Larry Edelson of MoneyAndMarkets.com: $5,000+
“I have every reason to believe gold will easily hit $5,000, or higher, by mid-2016…The monthly cycle chart for gold, based on data back to 1792…points to substantially higher gold heading all the way into June/July of 2015, followed by a correction, and then another blast off into 2017. The final high, with gold hitting at least $5,000, should come sometime between 2016 and 2017, at the latest.”
6. Jim Willie of GoldenJackass.com: $5,000+
“Demand has risen in direct response to both lower price and vanished trust in the system, including gold futures contract delivery. Like all Gold bull markets in the past, the investment demand breaks the spine of the illicit gimmicks and banker conmen criminal set. The population will demand Gold & Silver bars, coins, talens, biscuits, and jewelry. The people will pay whatever price eventually, and certainly premiums, until Gold is properly priced an order of magnitude higher. The equilibrium in the gold market will come when Gold is above $5000 per ounce.”
7. SocGen’s Albert Edwards: $10,000+
Edwards forecasts a massive stock market crash potentially lurking in the storm of the Fed’s taper. Mr. Edwards argues that today’s market looks identical to that of the pre-1987 crash and that gold could reach $10,000/oz. Fundamental factors support the higher gold price thesis as the metal is currently being supported by general volatility in the market along with global physical demand for the precious metal.
“At the risk of being called a crackpot again,” says the SocGen strategist, “I repeat my forecasts of 450 for the S&P, sub-1% US 10-year Treasury yields and gold above $10,000.”
8. Peter Schiff: $5,000+
Gold could go beyond $5,000, depending on how much longer money printing goes on. “A lot of people will get caught by surprise. People who buy and have the patience to hold on will be rewarded,” he said. As for the billion-dollar question – when — well, that’s a tough call even for Schiff. “Can it get to $5,000 in six months? Probably not. In two to three years it’s more likely. I doubt it will take five years. If it takes that long, it will go higher.”
9. James Turk, founder of Gold Money: $11,000
Turk is still expecting a 1:1 ratio for the gold price to the Dow Jones Index between 2013-15 as he predicted years ago but he has upgraded his forecast of the peak gold price from $8,000 to $11,000.
10. Louis Basenese of WallStreetDaily.com: $6,000+
“I’m convinced that the most compelling reason to own gold now is to protect against the U.S. government’s troubling debt levels…At the outset of the Bretton Woods Agreement in 1944, debt coverage stood at 10.9%. So if we go with that as a rough benchmark, we’re talking about a gold price target north of $6,000 per ounce. That’s based on the alleged amount of gold held by the U.S. Treasury. If it’s less, all bets are off.”
11. Rob McEwen, chief owner of NYSE- and TSX-listed McEwen Mining: $2-5,000+
McEwen has plenty of faith that the gold price will, within the next two years, head north of $2,000/oz and even cross the $5,000/oz mark in the not too distant future. McEwen pointed to historical precedents where governments debased their currencies through monetary expansion in excess of their sustainable debt loads, which caused the currency to devalue relative to assets such as gold. When confidence in a currency is lost, political casualties result and investors move to physical assets to preserve value. The strong demand for physical gold from the East was also a positive pulling factor.
*The original source of each of the excerpts above can be accessed by doing a google search of the content of each paragraph.
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This is not a typical bull market. Gold is not rising in value, but instead, currencies are losing purchasing power against gold and, therefore, gold can rise as high as currencies can fall. Since currencies are falling because of increasing debt, gold can rise as high as government debt can grow. Based on official estimates, America’s debt is projected to reach $23 trillion in 2015 and, if its correlation with the price of gold remains the same, the indicated gold price would be $2,600 per ounce. However, if history is any example, it’s a safe bet that government expenditure estimates will be greatly exceeded, and [this] rising debt will cause the price of gold to rise to $10,000…over the next five years. (Let me explain further.] Words: 1767
It is my contention that the price of gold rallies whenever the U.S. dollar’s real short-term interest rate is below 2%, falls whenever the real short rate is above 2%, and holds steady at the equilibrium rate of 2%. Furthermore, for every one percentage point real rates differ from 2%, gold moves by eight times that amount per year. So if the real rates are at 1%, gold will move up at an 8% annualized rate. If real rates are at 0%, then gold will move up at a 16% rate (that’s been about the story for the past decade). Conversely, if the real rate jumps to 3%, then gold will drop at an 8% rate. [Let me explain.] Words: 982
Lately analyst after analyst (161 at last count) has been climbing on board the golden wagon with prognostications as to what the parabolic peak price for gold will eventually be. That being said, however, only 33 have been bold enough to include the year in which they think their peak price estimate will occur and they are listed below. Take a look at who is projecting what, by when and why. Words: 644