gold price history

Article Index

Gold Price Forecast: How the Yellow Metal Will Reach $5,000 per Ounce

By , Money Morning -

gold price forecast

A few years ago I issued a gold price forecast of $5,000 an ounce. I still believe that's a realistic price target - and now prominent gold mining experts are following suit.

Rob McEwen, founder and former chair and CEO of GoldCorp, said in a recent interview, "I'm a long-term believer in gold and I see it ultimately getting to $5,000 an ounce."

Here's why gold prices are headed much higher...

A Gold Price History from Nixon to Obama

By , Money Morning -

Analysts look to the gold price history as a tool to make predictions about the yellow metal's direction.

A good place to start when examining the gold price history is the 1970s. Up until the early '70s, gold prices hardly fluctuated by more than a dollar or two.

But U.S. President Richard Nixon, who was in office from 1969-1974, decoupled the dollar from gold in 1971 due to various economic pressures.

And this had a major effect on where gold went after that…

Why Gold Really Crashed and What You Can Do About It

By , Chief Investment Strategist, Money Map Report -

The news is great at telling us what's happening. But understanding what's happening is what makes the difference between an average and a truly great investor.
Gold's crash on Monday is a perfect example.
The media fell all over itself talking about how gold was falling and how far it was off its highs. Yet few tied the devastating slide to real economic events let alone made the connection to actual trading.
But that's my bread and butter. And today I'm going to tell you what really happened and why.
Better yet, I'm going to tell you exactly how to play it...

In Gold, Not Cyprus, We Trust

By , Money Morning -

The savings-seizing shenanigans in Cyprus just reinforced the importance of having gold and gold stocks in your portfolio. An indeed, with gold at extreme lows, now's a great time to buy more. Frank Holmes explains.

As Cyprus Struggles, Now Is the Time to Buy Gold

By , Money Morning -

I’ll bet a few Cypriot bank account holders are paying much closer attention to gold now.
Since the announcement that Cyprus was looking to confiscate up to 10% of bank deposits, gold has risen by up to $24/ounce on safe haven demand. That’s no surprise. The yellow metal is not only real wealth, but the only asset that’s not simultaneously someone else’s liability.
Now that trust in the banks has broken down again, we’ve been given another hard lesson on the dangers of fiat money.
Here’s why this may be your last chance to buy gold so cheap...

Gold Prices Await Big News from Bernanke

By , Money Morning -

Gold prices are desperately waiting for bullish news from the Federal Reserve this week after slipping from last week's gains.

Last week, gold woke up from its sleepy August and increased 3.5%. It saw its greatest one-week jump since January and gold exchange-traded funds (ETFs) followed in its footsteps by reaching four-month highs and breaking 200-day moving averages.

These jumps came in response to the Federal Open Market Committee (FOMC) meeting minutes that suggested the need for more stimulus and some sort of quantitative easing. The report release extended the recent precious metals rally initiated by European Central Bank President Mario Draghi, who pledged his commitment to keep the Eurozone in place.

Gold prices on Monday fell from last week's high of $1,674.28 to $1,671.80, and have continued that decline this week. The most actively traded contract for December delivery was down Thursday morning by $1.10, or 0.1%, to $1,661.90 per ounce.

So what happened to dampen last week's enthusiasm for gold?

Europe, China Pound Gold Prices

News from abroad knocked down some of the gold price optimism.

Germany's Ifo Institute announced Monday that its business sentiment declined for a fourth consecutive month in August to 102.3; this came in lower than the 102.6 estimates and July's revised 103.2 figure.



To continue reading, please click here...

Gold Prices: Begging for QE3

By , Money Morning -

The Fed's Operation Twist announcement Wednesday slammed gold prices, and the yellow metal fell 2.5% Thursday.

Gold for August delivery ended last week down 3.8% to about $1,570 an ounce, well below its 2011 high of $1,920.30.

Before the two-day FOMC meeting, gold was up 4% year-to-date. Gold rose at the beginning of the week on hopes that the Fed would announce accommodative moves.

In the last round of easy-money moves back in January, gold rallied as high as 15% as investors flocked to the asset for protection. Since then, gold has dropped numerous times from a lack of additional news of more easing.

Gold was once again disappointed last week when the Fed said it would keep twisting, and the lack of a more aggressive maneuver failed to give a needed gold rally.

"To get gold really moving, you need a definite QE3," Sterling Smith, commodity analyst with Citi Institutional Client Group, told Kitco News. "Operation Twist is not nearly the food for a gold bull that outright QE is."

Gold Prices and Operation Twist

On Wednesday morning, the Fed announced the extension of its long-term government bond holdings by $267 billion to decrease borrowing costs while selling an equal figure of short-term securities to keep its $2.9 trillion balance sheet.

While scheduled to end this month, the Fed extended the Operation Twist program until the end of the year.

Operation Twist is derived from a Federal Reserve program that "twists" the yield curve or sells short-term securities from its holdings and buys longer-term ones in an effort to drive down longer-term yields.

Market watchers had been mixed about this happening.

Barclay's Capital saw Operation Twist as "the most likely outcome," saying it would provide additional time for the Fed to sift through and mull soft data that is "payback" from the additional warm winter hiring or a potentially lengthier prolonged slowdown, reported Kitco.

But since Operation Twist was considered the least the Fed could do, markets had priced it in already.

Jeffrey Wright, managing director and research analyst with Global Hunter Securities, said to Kitco he expected limited gains for gold on the heels of the "Twist," possibly to the $1,650 range, as the market has already been adding in the possibility for Fed action.

To continue reading, please click here...

Gold Price Outlook 2012: Miners Will Shine as Prices Soar

By , Money Morning -

Despite a pullback from its all-time high of about $1,920 an ounce set in September, gold is still trading in the $1,750 range. In fact, the glittering metal has gained 22% in the past 12 months.

What's more is that I believe gold prices will eclipse $2,200 an ounce next year, and shoot beyond even $5,000 an ounce after that.

So there's obviously still time to get in on this once-in-a-lifetime bull-run, if you haven't already.

Of course, every investor should at least have shares of a gold-based exchange-traded fund, but if you really want to profit from the price surge, you ought to look at gold mining companies.

Let me explain.

A Golden Opportunity

While gold prices have surged 22% over the past year, gold mining stocks have lagged curiously behind over that period.

The Amex Gold Bugs Index, a weighted benchmark made up of 16 of the world's largest gold and silver mining companies, began the year at 540, and after numerous troughs and peaks, we're back near those same levels.

Normally, gold stocks will leverage gold on a 2-for-1 basis, but in this case, we've seen miners move sideways as gold has advanced.

Yet with gold's price powering skyward, the gold miners have seen their margins expand, making them very profitable at current levels. That makes them absolute steals at these prices.

You don't have to take my word for it, either. Just look at what industry insiders are saying.

"A substantial disconnect has developed between the price of gold and the mining companies," said David Einhorn of Greenlight Capital. "With gold at today's price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further. Since we believe gold will continue to rise, we expect gold stocks to do even better."

Portfolio managers Michael Bowman and Allan Meyer of Wickham Investment Counsel Inc. concur.

"We are now finding a large number of gold stocks are hitting our value screens, something that has been unheard of in the past," said Meyer.

What else are experts noticing?

Well, as gold prices have risen and stayed high, the price/earnings (P/E) ratios of gold miners have been cut in half. That means the sector as a whole is at as compelling a value as it's been in three years. And with the price of gold set to rise still higher on the back of incessant money printing in the United States and Europe, these miners are only going to get more profitable.

How high is gold likely to go?

My own research tells me we should expect gold to easily reach $2,200 in 2012.



To continue reading, please click here...