Will Gold Prices Rebound in 2014? Our Experts Sound Off

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Will Gold Prices Rebound in 2014? Our Experts Sound Off

Charles Sizemore: Gold Won’t Shimmer in 2014

NewCharlesSizemore Will Gold Prices Rebound in 2014? Our Experts Sound OffEditor, Macro Trend Investor

Gold had a rough 2013. With a loss of 28% on the year, the spot price of gold was down by nearly the same percentage that the S&P 500 was up. And I don’t expect gold to regain its shimmer in 2014.

Let’s take a look at the macro environment as we enter the new year:

  • The inflation that gold enthusiasts have feared since the onset of the 2008 crisis is dead on arrival. The latest CPI figures show an inflation rate of just 1.2%, and energy prices are actually falling.
  • The quantitative easing that fueled the inflation fears of the past few years is already being tapered, from $85 billion in bond purchases per month to $75 billion per month … with more tapering to come.
  • The Federal budget deficit, though still far too high, continues to fall and is expected to be just 3.3% of GDP in fiscal year 2014.
  • Gold miners are contemplating hedging their risk by selling their production forward,  which will effectively cap the price of gold (and sends a very negative signal to the market).
  • Hedge funds and other large institutional buyers — the driving force behind much of the rise in the spot price of gold in the past decade — appear to be abandoning gold if the outflows from gold ETFs are any indication. Gold ETF holdings are now at their lowest levels since 2008.
  •  Gold now has competition in the anti-establishment crowd from Bitcoin and other “virtual” currencies. (I think Bitcoin is a joke, mind you, but that doesn’t mean that it won’t continue to steal gold’s thunder for a while longer.)

And on top of all of this, we should remember that gold had a monster secular bull market run that lasted 12 years. When the last bull market in gold broke, in 1980, it took two decades for it to finally find a bottom.

I try not to spend much time on specific price targets, as I see these as being something of a distraction, but I expect the spot price of gold to finish in the range of $1,000 to $1,100.


Article printed from InvestorPlace Media, http://investorplace.com/2014/01/gold-prices-per-ounce-experts/.

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