Gold prices have been battered in 2013. The yellow metal’s heading toward its first annual decline in 13 years. And that has investors wondering when the bleeding’s going to stop (or if it even will). Let’s take a survey then of the leading gold price predictions for 2014:
- $1,403 an ounce. That’s the likely average annual gold price in 2014 according to the Economist Intelligence Unit (per ArabNews), which is part of the Economist Group. The EIU expects prices to weaken further in 2015 to $1,350.
- $2,000 an ounce within a year. Those are the words of gold bug Peter Schiff, a famed investor and manager of the Euro Pacific Capital Inc. gold mutual fund (which has lost 6 percent since it launched earlier this year). Schiff told Bloomberg “he would ‘be amazed’ if the U.S. dollar didn’t collapse and gold failed to skyrocket before President Barack Obama leaves office in 2017.”
- $1,144 per ounce in 2014: That’s Goldman Sachs’s bearish prediction for the yellow metal. Goldman believes that trend will continue for years to come.
- $1,050 an ounce: An even more bearish prediction from yet another gold bear at Goldman Sachs: Jeffrey Currie, the company’s global head of Commodities Research. He went so far as to call gold a “slam dunk” sell (Bloomberg).
- $1,500 an ounce in the short-term: That’s from Bank of America Merrill Lynch’s Head of Global Technical Strategy MacNeil Curry (source). So long as gold doesn’t close below $1,251 an ounce, Curry believes we’ve turned the corner from a bear market to a bull market in gold (he’s one of the few!).
- $1,313 an ounce in 2014: That’s Morgan Stanley’s prediction for gold prices in 2014. They revised that down from $1,420, and they believe prices will continue to fall until 2018 (per the Telegraph).
- $1,275 an ounce: That’s BMO Research’s gold outlook for 2014. That was revised up from from $1,181 (per AgMetalMiner).
- $2,500 an ounce in 2014: The bull’s crown goes to Market Oracle, which lays out a lot of reasons why they believe gold prices will surge next year. Specifically, they cite closing mines, which will lead to a supply shortage, increased demand in India and Asia, inflation and a coming “gold mania.”
- $1,322.50 an ounce in 2014: That’s from a poll of 22 analysts conducted by Reuters last month (per LiveMint). Physical markets, not investment markets, will likely drive gold prices analysts said.
- $1,175 an ounce by Q3 2014: That’s according to a Bloomberg analysis of estimates from the “10 most-accurate precious metals analysts” the company tracks (per IOL).
Of course, there’s nothing that actually says gold prices have to move higher. The precious metals markets need a catalyst to fundamentally change the current direction (which is inexorably lower). If indeed we do see higher gold prices in 2014, look for some or all of the following precursors to foreshadow the move:
- An increase in economic stimulus from the Federal Reserve or congress.
- A sudden jump in inflation.
- Short covering (traders who are betting against gold start covering their bets).
- Growth in physical demand for gold bullion.
- Aggressive buying by central banks.
- A supply shortage due to mine closures.