It is sometimes heartbreaking to pay attention to forecasts about the price of gold. The more sensational and spectacular the price forecast is, the greater the cacophony.
It is worth looking at some of these forecasts to help keep things moving forward.
Title: $ 6,000 gold forecast and gold culture analysis through visualization 23 Jan 2012
Quote: “If the current gold bull market had followed the timing and rate of the bull market in the 1970s, the price of gold would have reached $ 6,000 before 2014. “
Gold price on January 23, 2012: $ 1679.00 per oz.
Gold price on March 14, 2014: $ 1382.00 per oz.
Gold price as of December 31, 2014: $ 1,181.00 per oz.
How far can the price forecast be from the base? Gold not only reached its target price, but went in the opposite direction from that month onwards, and over the next two years, on December 31, 2013, the ounce began to fall to $ 1205.00.
The problem is not the credibility of $ 6000.00 gold. Very convincing and possible; perhaps. However, the forecast was specifically time-oriented and was terribly erroneous in terms of direction and time.
All this is an excuse. As long as you do not own a subscription service and / or give investment advice or trade advice to others.
Title: JPMorgan forecasts $ 1,800 worth of gold by mid-2013 01 February 2013
Quote:“JPMorgan sees Gold at $ 1,800 as “Crisis” in South Africa and “Rising Instability” in the Middle East by mid-2013 JP Morgan Chase & Co. expects gold to rise to $ 1,800 an ounce by mid-2013 he said. “In crisis,” according to Bloomberg.“
At the time of publication, the price of gold was $ 1,667.00 per ounce. Five months later, on June 29, 2013, an ounce of gold was $ 1,233.00.
The $ 1800.00 gold call was a ‘safe’ forecast. Only an eight percent increase from the current (then) $ 1,667.00 level would lead to a gold price of $ 1,800.00.
But, as in the previous example, the price went south in revenge; twenty-six percent reduction in five short months this time.
Title: Trump received $ 1,500 earnings signals Gold … November 10, 2016
Quote: “Trump marks US president’s victory, $ 1,500 an ounce for gold in the interim.”
Gold price on November 10, 2016: $ 1258.00 per oz.
Gold price on July 31, 2017: $ 1268.00 per oz.
Apparently, gold did not see the ‘signal’, because its current price is the same as the price on the day the forecast was released to the press immediately after the elections last November.
And what does the writer mean by “intermediate term”? The longer the time frame, the lower the value in the forecast. The projected dollar increase is twenty percent. If it takes two years, it is about one hundred percent a year. In this situation – or if it takes more than two years – is it worth a bold title?
Title: Trump will send the price of gold to $ 10,000 November 10, 2016
Gold prices and dates are the same as in the example above. With gold, which was ten months ago, when can we expect progress towards the price target?
More bizarre price forecasts generally revolve around the collapse or collapse of the monetary system. The accident occurred as a result of the complete rejection of the US dollar after decades of depreciation. People refuse to accept and hold US dollars in exchange for the goods and services they offer.
Now imagine that you own gold then. Do you sell? At what price? How much worthless US dollars will you spend on an ounce of gold?
If someone offered you a billion monopoly dollars for an ounce of gold today, would you take it? What about ten billion?
Well, what if we see a rapid decline in the value of the US dollar in the next few years? Let’s say the decline is a loss of fifty percent of the current level of purchasing power for the dollar. This will double the current level to the price of a gold price of about $ 2,500.00 per ounce.
If gold and the US dollar are currently in balance, it is valid (I think). In other words, the current price of gold is $ 1,250/60, the exact opposite of the aggregate decline in the value of the US dollar since 1913.
A fifty percent decrease in the purchasing power of the US dollar will be reflected in the rise in prices for other goods and services; an example that has been very familiar in the last hundred years.
If you have a working market and you think you are selling a little gold and making a profit, how much will it cost for anything you can decide to buy? Do you really think you can buy other valuables at ‘discounted’ prices then?
Gold was $ 20.00 per ounce in 1913. It is currently $ 1,260.00 an ounce. That’s sixty times more. But this does not represent a benefit. Because the total price level of goods and services today – in general – is sixty times higher than in 1913.
In short-term situations, there are times when you can benefit from sharp movements in gold. In general, these are preceded by major movements that reflect the aggregate decline in the purchasing power of the dollar against the US dollar. And to understand, albeit a little, the expectations of others that the price of gold outweighs the equilibrium against the US dollar.
In 1999/2000, gold fell to the level of $ 250-275.00 per ounce. Shortly thereafter, it began a decade-long period, reaching a peak in 2011 of about $ 1,900.00 per ounce.
After its peak in 2011, gold fell for the next five years, slightly above $ 1,000.00 per ounce. A short-term jump in early 2016 brought it back to current levels ($ 1250-1350.00), where it generally remained at or below any level.
Where were all these “experts” in 1999/2000 and what did they predict then?
And since 2011/2012? They say the same thing many times. Buy it now! Buy More! Without being too late!
One day it will be too late. But it is more a matter of financial survival than ever before. The obsession with profit, forecasting, and trade obscured the real basis.
And in one way or another, most people’s earnings are likely to remain in the fog before doing anything meaningful with them.
Gold – physical gold – is real money. This is real money because it is worth the money. And the cost is stable. The value of the US dollar continues to decline over time. The ever-declining value of the US dollar and people’s perceptions of it determine the price of gold.