Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Predictions for 2022

Commodities / Gold and Silver 2022 Jan 17, 2022 - 05:19 PM GMT

By: Kelsey_Williams

Commodities

PREDICTIONS FOR GOLD

There seems to be an almost fanatical obsession with ‘fortune telling’ when it comes to the financial markets. Gold is no exception.

It is worth taking a look back at some earlier predictions to help put things in perspective…


EXAMPLE NO. 1 

Gold Forecast $6000, And Gold Mining Analysis Through Visualization  January 23, 2012

Quote: “If the current gold bull market was to follow the timing and extent of the 70s bull market, the gold price would reach $6000 before 2014.” 

The price of gold on the day the article appeared in print was $1679 oz. In March 2014 the price of gold was down to $1382 oz. and by year end 2014 gold was priced at $1181 oz.

How far off base can a price prediction be?  Not only did gold not reach the target price, it went in the opposite direction – beginning that same month – and proceeded to decline by thirty percent over the next two years, ending at $1205.00 per ounce on December 31, 2014.

The problem is not the plausibility of $6000.00 gold. It is both plausible and possible.   However, the prediction was specifically time-oriented and horrendously misjudged in terms of timing and direction.

EXAMPLE NO. 2

JPMorgan Forecasts Gold $1,800 By Mid 2013  February 1, 2013

Quote:JPMorgan Sees Gold At $1,800 By Mid 2013 As South Africa “In Crisis” And “Escalating Instability” In Middle East J.P. Morgan Chase & Co. said gold will rise to $1,800 an ounce by the middle of 2013, with the mining industry in South Africa “in crisis,” according to Bloomberg.

The price of gold on the date the headline appeared was $1667.00 per ounce.  Five months later on June 29, 2013, the price of gold was $1233.00 per ounce.

The call for $1800.00 gold was a ‘safe’ prediction.  Only an eight percent increase from the existing (then) level of $1667.00 would have resulted in a gold price of $1800.00.

But, as in the previous example, the price went south with a vengeance. In this case, gold’s price dropped twenty-six percent in five short months.

FINANCIAL MARKETS ARE THE NEW CASINOS

The time periods which we consider and focus on with respect to analysis and investing –  be it gold, stocks, real estate, etc. –  have become increasingly short-term.  In fact, the financial markets seem to be more characteristic of casino-type activity. Investing has become speculation.

Also the volatility is exponentially greater. At times it seems more like a crap-shoot than fundamental investing, with products such as leveraged ETFs, options on futures, and more.

Don’t get me wrong.  I am not against speculating.  Speculators serve the markets well and provide liquidity which otherwise might not be there.  Their role is critical to the orderly function of the markets. Things would always be worse without speculators.  But the nature of the financial markets has changed radically and investors need to recognize that fact.

The single most serious factor of concern with regard to orderly functioning of today’s financial markets is systemic risk.  This is true on a world-wide basis and no country or market is immune.

With these things in mind, can anyone really make predictions with any  degree of reliability or accuracy?  I think not.  And the predictions that are made seem to be either too traditionally conservative given the explosive – and implosive – nature of the markets; or they tend to be just plain ridiculous.

CURRENT UPSIDE POTENTIAL FOR GOLD

The average monthly closing price for gold in July 2020 was $1971 oz. which was followed the next month by an intraday peak of $2058 oz.

Due to the additional loss in US dollar purchasing power since that time, the inflation-adjusted gold price peak for August 2020 is now $2114 oz.

With gold at $1820 oz. the current upside potential is limited to approximately $290 oz., ($2114 oz. – $1820 oz), or sixteen percent. (see The Meaning Behind Gold’s Triple Top)

On the other hand, with near-term potential downside for gold at $1375-1400 oz. (see Gold Has Lots Of Potential Downside), the risk reward ratio is unfavorable for bets on the long side.

SUGGESTIONS FOR 2022

A suggestion to the gold ‘swamis’:  rather than more predictions, how about new resolutions?  Some possibilities might include…

  1. Resolve to view gold for what it is – real money; not an investment.
  2. Study and learn the history of gold as money.
  3. Stop expecting gold to be the “next big thing”.
  4. Scale back your unrealistic expectations. (see Gold And Unrealistic Expectations)

Have a fabulous 2022!

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!

By Kelsey Williams

http://www.kelseywilliamsgold.com

Kelsey Williams is a retired financial professional living in Southern Utah.  His website, Kelsey’s Gold Facts, contains self-authored articles written for the purpose of educating others about Gold within an historical context.

© 2022 Copyright Kelsey Williams - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in