GOLD MARKET FORECASTS: Are Completely Worthless

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:

GFMS Sees Gold Climbing Toward $1,900 on Central-Bank Stimulus

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 Sees Gold Returning To Mid-$1,800s In 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:

Gold Price to Lose More Gloss in 2014:  GFMS

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.

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16 Comments on "GOLD MARKET FORECASTS: Are Completely Worthless"

  1. speaking of worthless forecasting for the last couple of years, its been kind of unsettling to watch to all the silver stacker gurus pee their pants with excitement and post pictures of rockets and bulls every time the spot price moves up 30 cents. Not that I dispute the fundamentals by the way, but the effect is like crying wolf and when this collapse does hit home, people will have by then learned to ignore the chatter.

    • webster… I wonder whom you might be referring…LOL. Anyhow, I look at events in the longer term. I see the value of gold and silver increasing substantially in the future due to the fact that the world has an OVER-SUPPLY of worthless paper assets and an UNDER-SUPPLY of physical assets that indeed protect wealth.

      The world is heading back to the way of protecting wealth the very same way squirrels stockpile and save NUTS-ACORNS for the winter. You will never see a squirrel take a paper contract on 500 ACORN FUTURES.

      steve

      • Now you did it!

        You just gave Goldman Sachs another idea.

      • Ha. I think I’m referring to myself as much as anybody. Running around telling people there’s problems with the economy, trying to wake them up and then….. nothing really happens, just the boiling frog thing…..I just keep my mouth shut now more or less.

        • I’m new to the game of gold and silver, a mother of two teen and grateful for a self employed husband who listened to my pleas to sell and get out of as much debt as possible. I have one friend who is an American and she has been telling me this stuff for years now. But it wasn’t until last September that I had my eyes opened. I thanked her so much for trying to get me to see what is happening with the economy in the U.S. and how Canada is not exempt. Now, I am trying to get my family members to listen, I have 6 siblings and a number of nephews and nieces all adults, some with very young children. Only one sister has started to buy precious metals, the others ignore me. So, I too have stopped talking about it. When the student is ready, the teacher appears as the saying goes but here’s the thing. Here I am buying silver and gold for our future and stocking up on food supplies, just in case, preparing for what we’d do in the eventuality of disruption of services and energy supply but people we love and care about have done nothing. I can’t stockpile for this large extended family and I wonder how to deal with this issue? You can’t force people to prepare for the future and if I was to divide my precious metals amongst them, there won’t be much left for our family to realize our future either. My friend is a Texan, living here and her closest family members aren’t listening either. Its awfully lonely out here, when everyone else is oblivious and clinging to the status quo. I really like this website and thanks for the posts.

      • Steve, your energy/pm research is outstanding. People just think that problems of all kinds will/can never reach the shores of the USA.

        The earth just doesn’t work that way…the squirrels get it.

    • Like David Morgan…most of these guys did some good work then got tv/radio famous and became shills like the rest.

      Now we are near 22 again.

      Buyers should be buying for the day when you won’t be able to buy any longer.

  2. Bed, Bath and Beyond

    Steve.

  3. The correct way to think about gold and silver is as follows: Buy some of it and hope that it will never go up substantially.

    The world of exploding gold and silver prices is a world to be afraid of, not a world anybody should be excited about.

    The longer precious metals stay low, the more of it one can buy.

    Finally, if prices explode, what are you going to do? Selling it? For fiat money? That does not really make any sense.

    • Robert… as you notice, I use the term “VALUE”. I try not to use the word “PRICE”. While I agree a world of exploding gold and silver values may be a rough one, it’s coming nonetheless.

      The over $100 trillion in conventional & sovereign assets under management are invested in a economic system that has no future… and the future is now here.

      Global GDP cannot rise unless the energy supply increases. Tapping into LOW EROI energy to bridge the gap of a falling conventional oil supply postpones the peak, but does nothing to offset the declining amount of capital formation now increasingly consumed by the energy industry.

      Fundamentals always win out in the end…

      steve

    • RH…you had better learn to barter… better yet, learn how to negotiate and barter.

      Those stuck in the dollar mentallity will not have much of a chance.

      Free your mind and your ass will follow…

  4. So true; and great examples to make that point. Much of the analysis and predictions do more harm than good. Regarding this epoch Au/Ag bull, it’s better to be an investor than a trader. I’ve been watching this market for the better part of it’s run and my timing has almost always been off. Not only that, this indisputable, unstoppable bull market has always ‘seemed’ to be moving sideways or down. The propensity for up-moves to release suddenly is amplified by the manipulation. Good luck with that – you’re either in or you’re out.

    I read a while back that tops and bottoms are for liars and fools.

    “The world of exploding gold and silver prices is a world to be afraid of, not a world anybody should be excited about.” agreed

    “…a world of exploding gold and silver values may be a rough one, it’s coming nonetheless.” like a rainbow follows rain

  5. Talking heads and the new paradigm.
    For years I followed one of the most astute Wall street observers. Harry Schultz, legendary financial mind and writer of one the best newsletters to ever hit the street.
    His last newsletter to his subscribers before he retired a couple of years ago, he wrote;
    “Roughly speaking, the mess we are in is the worst since the 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage and political will to recognize the mess and act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched and where the rot is by far the deepest.”

    Practising ‘due diligence’ in uncharted waters is dubious at best. All one can do is seek financial shelter and wealth protection. Since the dawn of time, physical gold and to a lessor extent, silver, have been that protection. History proves this beyond a shadow of a doubt. Those who are not students of history, are condemned to repeat the mistakes of the past.

    Most precious metals “talking heads” nowadays, are not students of history and giving them any type of credence in their utterings, will lead you into financial danger. Winston Churchill once said, ‘that to know where you are going, you must first know where you have been’.

  6. Hmmm, my forecasts have been spot on. All one has to assume is that the FED is going to have problems with the USD that is not going to support a rising gold price….

    So paper gold goes down. Right along with the COMEX stockpiles – which I might add is kinda normal (although not this extreme).

    And since we are doing generalities here, I can also CONclude that this is a holding action until the wheels come off: banking, LBMA, GLD, COMEX. When paper fails, metal wins.

    We’ll be the winners amidst a lot of losers; kinda like that “Walking Dead” series.

    But can one look at the drain at the COMEX and GLD and forecast that the ending may be around the end of the year…I only mention this because it isn’t speculated about by most of the pundits and I wonder why?

    Hope you haven’t moved on to the next article, Steve….

    Best,
    G.

  7. @ Lashky

    I am a fellow Canadian and can readily sympathize with you. This will be a VERY common problem…Like you I have been yelling for years about what is coming and as you probably know children seldom listen to their parents as adults. Even when one makes sense.

    You are going to have to make some very hard decisions. You won’t be alone.

    The only thing I can suggest is to wait and hope that events can teach them without being too ruinous…If they remain of the opinion that metal is for cashing out (as in an inheritance), then enjoy your stash as best you can. Giving bullion away to those who WILL not understand will not save them….As I said, hard decisions.

    Help those that are prepared to help themselves. They have already heard the truth from you for years. They are not innocent like the other victims around you.

    Good luck.
    G.

  8. I just read about gold prices going down today in CNNMoney, is this true?

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