$1700 this year?

Discussion in 'Gold' started by hiho, May 12, 2011.

  1. hiho

    hiho Active Member Silver Stacker

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    Source: Lawrence Williams, May 11, 2011 - mineweb.com$1700 gold this year, $2000 next and possibly $3000 or perhaps $5000 this decade before it eventually falls back are Jeff Nichols' predictions for the gold price.
    NEW YORK
    Specialist gold analyst, Jeffrey Nichols, has continually been ratcheting up the number of reasons he sees for being bullish on gold, however, as he told Mineweb on the sidelines of the New York Hard Assets Conference this week, some of these are really expansions of the multitude of factors he had already pointed out to his followers in previous analyses.
    But Nichols's reasoning is still worth mentioning as he has been very correct in his predictions for the direction of the gold price over the past few years, even if perhaps some of his price predictions have not quite been achieved - at least not yet. One needs to classify Nichols as a cautious gold bull - he is not one to make forecasts of enormous gold price increases in the short term, although he does feel the price has a fair way to go yet.
    Let us look at his eleven reasons:
    Limited growth in global mine production of gold.Overall in Nichols' view these factors all come together to generate a growing gap between global supply and demand.
    To these we might add ever rising mining costs - it is becoming increasingly expensive to mine gold, in particular outside the dollar area as the effects of a product which is paid for in depreciating dollars, while input costs continue to rise in local currencies, take their toll. Although many mining companies quote seemingly low cash costs, there is no standard definition of how these are calculated and they frequently do not incorporate some ongoing financial and capital costs. There are a fair number of mining companies out there who will find it difficult to remain profitable with gold below $1,000, while the cost of developing new mines becomes more and more costly as often now the tenor of the deposits becomes lower and lower and mines may need to be developed in areas of increasing political and geographical risk.
    Nichols went on to expand on each of the eleven reasons for bullishness in the gold market mentioned above and ended with his predictions of where the gold price will likely run. He reckons gold's fortunes remain very bright with all these supportive price drivers and looks for new all-time highs in the months ahead. He does stick his neck out on a specific price prediction and reckons gold has every chance of reaching $1700 by the year end, $2000 in 2012 and "possibly $3000 or even $5000" before a time when he feels the cycle may eventually reverse later in the decade.
    He also prefers physical metal to gold stocks as being a safer bet. While the upside potential in stocks may be higher he considers these as also carrying significant additional risk - although he does feel there is a place for these as part of a precious metals portfolio.
     
  2. domdolittle

    domdolittle Active Member Silver Stacker

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    I think those figures are conservative...

    but then again, I'm only an eternal optimist :cool:
     
  3. hiho

    hiho Active Member Silver Stacker

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    gold is the ship in the night :cool:
     
  4. Graeme

    Graeme Member Silver Stacker

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    As gold is priced in USD, I expect prices to increase significantly as USD devalues, but relative to our dollar, I think gains will be marginal but steady.
     
  5. boston

    boston Well-Known Member Silver Stacker

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    My prediction for AU is A$1900 by years end, and in no small part attributed to a revaluation of the A$.
     
  6. Wout

    Wout New Member

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    Aus dollar i think is overvalued so im gunna say $1650 at years end in aus
     
  7. silvertongue

    silvertongue Member Silver Stacker

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    I think $1700 is not unrealistic. Many expect it to rise above $2K before the year is out, but I'll admit I'm sceptical about this figure myself. (I'm also sceptical about $250 silver this year, but I won't be too disappointed if I'm wrong... Just don't see how...)
     
  8. thatguy

    thatguy Active Member

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    july will be were the action is @ imho, will set the tone for the rest of the year.
     
  9. Guest

    Guest Guest

    So if gold does have its meteoric rise Who will buy it. and with what?

    REDBACK
     
  10. fishball

    fishball New Member Silver Stacker

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  11. bubbleboy

    bubbleboy Member

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    Central Banks. With their own currencies.

    'Central bank gold buying spree continues: IMF'
    London (Platts)--12 May 2011 / 530 am EDT/930 GMT
    In its press release, the Banco de Mexico indicated that its acquisition of gold was in line with prudent diversification principles of reserves management.
    http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/8885224
     
  12. Guest

    Guest Guest

    A Central bank on SSnow that would be something to see.

    ;)

    REDBACK
     
  13. grinners

    grinners Active Member Silver Stacker

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    I dont get how people can think the AUD is over-valued when the US is in the state they are in... :S They can't even pay the interest that they owe on their debt!!! How much money would you put into the USD for a promise of 10% returns atm? $0 Most likely at the moment as they can't pay it back. The only way out is to default or hyperinflate.
     
  14. hiho

    hiho Active Member Silver Stacker

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    or War :(
     
  15. fishball

    fishball New Member Silver Stacker

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    The main reasons AUD are so high right now is because of commodity prices surging upwards due to China going crazy buying.

    As soon as they stop the demand for AUD will weaken a lot and our economy will slow down a fair bit since the major driver right now is our mining boom.

    You hear about the 'velocity' of money all the time, imagine this backwards. For every dollar less we get from China we will suffer 10x more pain (if we had a velocity of 10). Something like that.

    The economy here right now is very risky, we are over-reliant on one major sector for starters, our banks are all financing from overseas (see Hungary/Austria for what happens when 70% of your debt is not in your currency), our RE 'growth' is stagnating etc

    The US might be bad right now but Australia is on a fine line as well, the 'strong AUD' has blinded a lot of people from the potential turmoil due to come.
     
  16. pixha

    pixha Member

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    ^Agreed - atm we are blinded by the mining good times and at the moment the government doesn't seem to be doing anything proactive about making sure growth is sustainable when the resources boom starts to fade.
     
  17. hyperinflation

    hyperinflation New Member Silver Stacker

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    To be honest, I'm pretty glad the govvie is doing nothing... if they were as efficient with trying to 'manage' the resources boom, as they are with everything else they do... then we would probably be worse off than if they didnt touch anything...

    Its up to individuals to be proactive about exploiting the stong AUD.. such as buying gold on the cheap
     
  18. pixha

    pixha Member

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    I just think with progressive thinking this finite resources boom could really setup Australia to be comfortable in the future... particularly by putting resource wealth back into agriculture etc.
     

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