Gold to punch through $800/oz in 2008
by Brendan Ryan
Date: September 26, 2007
GOLD guru Martin Murenbeeld is predicting an average gold price of $823/oz for 2008 as positive market fundamentals bear out his earlier, bullish forecasts.
Speaking at the Denver Gold Forum, Murenbeeld also forecast gold would average $683 for 2007 and end the year at $754.
Murenbeeld assesses the gold market through econometric models which set out three price scenarios out of which he derives a "probability-weighted" forecast. His predictions have been remarkably accurate over the past four years.
At the 2006 Denver Gold Forum, Murenbeeld predicted an average price of $605 for 2006 (actual average price: $604); a gold price of $646 at end-2006 ($636) and an average of $679 for 2007. The actual average gold price for 2007 to date is $664.
Murenbeeld pointed out that if the gold price maintains $720 until the end of the year, then the average price for 2007 will be $679.
Murenbeeld presented the same eight reasons to be bullish on gold that he had highlighted a year previously... Top of the list is that the monetary reflation he predicted last year is now "at hand" while the dollar "has broken down and must decline further."...
Turning to world foreign exchange markets, Murenbeeld said foreign reserves of US dollars had exploded to $5 trillion with China alone holding an "obscene" level of $1.3 trillion.
He believed this would result in a shift from dollar reserves with some of those funds being diverted into gold.... "The rising oil price enriches a small group of people who have a penchant for buying gold...."
Turning to gold supply, Murenbeeld said his model suggests that western world gold output will decline. He was not worried about central bank sales of gold....
Murenbeeld also pointed out the shortest cycle in the gold market for either up or down legs had lasted 10 years. "We are about six and a half years into the current up cycle and I must also point out that, in all these cycles, there can be a year where the gold price takes a setback. But that does not mean the cycle is over."
Murenbeeld outlined two bearish issues. Should there be an economic recession then demand for commodities would fall and gold often suffered as well... monetary authorities could focus more on controlling inflation and hike interest rates which would be bad for gold...
The above information has been redacted from the article as it originally appeared on miningmx.com on September 26, 2007.
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