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LAWRIE WILLIAMS: 2018 gold price forecasts - Murenbeeld and World Gold Council

We recently published an article which drew quite heavily on research by Canada’s Murenbeeld & Co regarding headwinds ahead for gold – click on Gold facing severe headwinds despite overvalued dollar – Murenbeeld to read or re-read – and one suspects that Dr. Murenbeeld reached these conclusions in his research for his annual gold price predictions for the year ahead.  These conclusions are usually the highlights of his early-year presentations at various events around the world.

His new predictions for 2018 have just been published for subscribers to his economic service -see:www.murenbeeld.com - and as usual he presents three price scenarios for gold looking ahead to which he gives various weightings and uses these weighted averages (for worst, base and optimistic cases) to draw an almost final quarter by quarter gold price conclusion for the year ahead.  But he again adjusts these figures further to take into account possible external geo-political events which are not considered in his initial price scenarios.  The forecasts are all generally conservative and sometimes his overall predictions come close to eventuality.  Other times they fall short on the positive or negative side, but seldom are they out by any significant amount. 

Thus Dr. Murenbeeld’s 2018 predictions, if they come about, will disappoint the gold bulls, but also confound the gold bears.  He is very much on the middle path, although he thinks his more positive scenario is the one which should be followed by the world’s central bankers, but only gives this a 25% likelihood weighting.

His weighted predictions for the gold price averages for 2018 are as follows (taking into account his geopolitical event adjustments):

Q1: $1,281,   Q2: $1,301,  Q3: $1,329,  Q4: $1,347.  However he does say in his commentary that he would not be surprised if at some point during the year the $1,400 level might be breached intra-day, but obviously doesn’t anticipate that this level is sustainable.  Looking beyond 2018 he also predicts gold averaging $1,351 in Q1 2019 and continuing to rise further to $1,368 in 2019 Q2.  Bear in mind that these are all average prices and they thus could encompass some sharp fluctuations above and below the specified levels.  As an example, in 2017 gold prices have fluctuated between around $1,149 and $1,351 with an average price of only $1,206 year to date.  Dr Murenbeeld's analysis is thus just about looking at an average 9% increase in the gold price next year.  Steady as she goes!

Meanwhile the World Gold Council (www.gold.org) has just published its latest Gold Investor publication in which its chief strategist, John Reade, is also optimistic on gold’s likely performance in 2018.  He cites global monetary policy, a possible fall in the US dollar index, a switch from overpriced equities into precious metals, demand growth in China, India and other gold supportive markets like Germany, all as likely positives for gold.  He makes no price forecasts  but anticipates the gold price continuing to grow in the year ahead, but again at a pretty conservative rate.

Neither of these stated reports suggest an on-fire gold price next year, but both are at least conservatively positive.  Deep down we suspect things could move a little faster and gold end the year at $1,400 plus but that very much relies on those holders of the big shorts on the COMEX futures market allowing prices to rise faster than they have been allowed to in the current year.  We hope for better things but aren’t holding our breath in anticipation.

16 Dec 2017

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London – recently described as the World’s No. 2 University (after MIT).

e: lawrie.williams@sharpspixley.com

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