To really find out where the price of gold is heading, one might hire the NSA to listen in on the Fed and member banks secret behind closed door meetings. However, if you don’t have that capability, then I would advise against following much of the present gold market analysis … as it has become completely worthless.
To prove my point, lets look at three different forecasts from Thompson Reuters GFMS this year.
JAN 16, 2013:
Gold will climb toward $1,900 an ounce and average a record in the first half of this year as central-bank stimulus boosts investment demand, according to Thomson Reuters GFMS.
While investment fell 1.2 percent last year in tonnage, it set a record of about $87 billion as prices averaged the most ever, and will jump 20 percent in the first half from a year earlier, the London-based researcher said today in a report. Central banks added the most gold to reserves in 48 years in 2012 and will buy another 280 metric tons in the first half, countering a drop in jewelry purchases and higher recycling.
Here we can see that GFMS states gold will hit $1,900 and average a record in the first half of the year. Well, of course that didn’t happen as we had two big take-downs in April and June.
Then we had the next forecast be GFMS in April:
April 4, 2013
Thomson Reuters GFMS said Thursday that it looks for gold to climb back to the mid-$1,800s before the end of the year.
….The report said that U.S. developments will remain a key factor driving gold price movements over the course of 2013. While improving but still patchy economic data contributed to a softening of the gold price in recent months, the consultancy said it feels this is already is already priced into the market. Meanwhile, there is a continued lack of confidence that ongoing debate over budget cuts and raising the debt ceiling will result in a satisfactory and timely resolution.
However, Thomson Reuters GFMS did offer caution for further into the future. “There’s arguably clearer light at the end of the tunnel in that we can perceive a return to something more like normality for the macro-economic backdrop, and that could easily entail the start of a secular bear market, perhaps in late 2013 or more probably in 2014,” Meader said.
So, here GFMS believes gold will still hit $1,800 by the end of the year. Interestingly, this forecast came just a little more than a week before the BIG TAKE DOWN of gold and silver on April 12th. Probably just a mere coincidence.
Anyhow, at the end of the article, GFMS puts in a disclaimer that “returning to something like normality for the macro-economic backdrop could easily entail the start of a secular bear market.”
I would kindly like to remind the reader, that the U.S. economy is not approaching anything like a normal recovery. What we have is massive debts and monetary printing holding up the biggest HOUSE OF CARDS PONZI SCHEME in history.
While the typical MSM investors might believe this “Return to Economic Normalcy Propaganda”, anyone with 3rd grade math skills and common sense understands things are worse than ever. That is why we have seen the registered gold inventories at the COMEX fall from 3 million oz in the beginning of 2013 to 670,000 oz today. Furthermore, if you look at the chart on King World News, you will see that the open interest contracts to physical gold has risen to nearly 56 to 1.
After getting two forecasts wrong, GFMS decided to update their outlook for gold in their most recent news release:
September 12, 2013:
LONDON: Gold prices are likely to contract further in 2014, after tumbling for the first time in more than a decade this year with the case for bullion undone by confidence in a stabilising global economy, a metals consultancy said on Thursday.
In an update to its Gold Survey 2013, Thomson Reuters GFMS said the market could beat a retreat below $1,300 towards the end of 2014 as U.S. monetary stimulus is withdrawn, fueling talk of rising interest rates.
The consultancy expects prices to average $1,350 next year, down 7 percent from $1,446 in 2013, with support seen between $1,200 and $1,250.
What a change in forecast in just five months. So, we went from a high of $1,900 from their Jan forecast, to back up to $1,800 in their April release… now down to $,1446 and lower in 2014 in the most recent update.
You see the problem with forecasts is that they can always be updated. No one is ever wrong here. If an agency comes out with a BULLISH forecast, but the opposite occurs… nothing like an UPDATE to set the record straight.
I am not singling out GFMS, as many other MSM gold forecasts have been completely wrong. Furthermore, to say that the lower price of gold is due to an “Economic Recovery” is pure nonsense. If the world believes in economic growth by massively increasing debt is sustainable, well then maybe we should release Bernie Madoff from prison and let him run the Federal Reserve.
Lastly, forcing the Indian people to stop buying gold which caused imports to decline 95% in August is not a long-term solution. However, the fiat monetary regime will utilize any WIN in their favor. Just like the collapse of the 1960’s London Gold Pool, the present tactic to control the gold market will end in the same result.
It’s time to IGNORE gold market forecasts and to focus on the continued collapse of the U.S. Economy and Financial System. One of the best ways to guarantee wealth preservation in the future is to invest in physical gold and silver.