And so it begins. Official Wall Street forecasts for the price of gold should now start appearing in the sub $1000 range. The strength of the US dollar has seen gold, silver and other commodities hammered over the past month of so and this could very well continue into the near future. Bloomberg reports today that Georgette Boele of the Dutch (state owned) bank ABN Amro NV forecasts gold closing this year around $1,000 per ounce and continuing its decline to $800 per ounce next year.
"Don’t try to catch a falling knife,” analyst Georgette Boele wrote in an e-mailed report received today. “The U.S. dollar rally has further to run, especially if the Fed turns more hawkish this year."
If you follow this site, you would have read our story from last year where Jim Rogers presented a pretty good rationale in the summer of 2013, for why we are likely to see gold hit $900 (approximately 50% correction from the top) before it consolidated and went back up. So this drop in the gold price is all expected, right?
Gold bullion prices are now hovering near levels not seen since 2010 with the downward trend towards that $1,000 mark. The upcoming Swiss referendum which may see that country's central bank having to hold at least 20% of its assets in gold (up from the current 8%), may be a turning point (up) in the near future. A "yes" vote would mean purchases of 1,500 tons of physical gold by the Swiss national bank. Though as is the case with all votes it is not a certainty, so this is probably not the sound basis of investment for most people even as we are sure it will add to the speculative zeal that has recently been observed seen in gold trading.