Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Gold managed to trade back above $1,500 an ounce in afternoon dealings in New York on Wednesday, but a new report suggests that’s as good as it’s going to get.
Capital Economics in a note says all the drivers for the rally in the gold price – weakening global growth, safe haven demand and low interest rates – are now baked into the price.
The independent research house argues that gold will end the year around today’s levels and is set to drop by double digits in percentage terms in 2020 based on three factors:
Firstly, US Treasury yields are forecast to recover as “investors’ expectations for monetary easing are disappointed” and the increase in negative-yielding debt (now totalling some $16 trillion), particularly in Europe and Japan, is halted.
Away from paper markets, a third factor depressing prices in 2020 is gold trading at record highs in China, India and more than 70 other currencies
Capital Economics believes global economic growth will be soft next year, but is sanguine about the possibility of an outright recession “currently anticipated by the market.” As a result investor risk appetite should pick up, tarnishing gold’s reputation as shelter in a storm.
Away from paper markets, a third factor depressing prices in 2020 is gold trading at record highs in yuan and in rupee (and more than 70 other currencies). China and India is responsible for the bulk of global consumer purchases of the precious metal and higher import duties in the latter will only hurt demand further.
Capital Economics believes gold will decline to $1,350 an ounce by the end of next year. The decline in silver ($18.20 on Wednesday) will be steeper absent a major factor behind gold’s performance – central bank buying – with the metal down to $15 an ounce by end-2020.
Gold hit an intra-day high of $1,566 one week ago – a six-year peak – but a three-pronged attack by determined bears saw the metal suffering one of its worst falls in history last Thursday.
Not that there’s a shortage of bullish prediction for the gold price, most notably Citigroup, which yesterday said $2,000 in the next year or two is a strong possibility.
That would constitute a record price in nominal dollar terms, but adjusted for inflation, January 1980’s $850 an ounce remains the all-time high.
12 Comments
Michael Lucas
Want to keep abreast of prices
Barry Morgan
This is all bullshit propaganda, initiated by people with vested interests!
Freddy quimby
Gold will rise, like it or not!!!
Larry Paul Johnson
Every point made by the author is nonsense. Just reverse the conclusion and you have the reality for each point.
Gold at all time highs in 70 + countries drives the price up. All currencies are falling and have for years – and gold is the measure. How could gold fall in an environment of negative interest rates?!?! This piece is a disgrace and the cumulative consequences of this MSM nonsense is a degradation of a media destroying its own credibility. Shame, shame!
Viktor Rigo
The writer must be living in a dark windows room..gold will have no competition. Fed will ease , trade and budget deficit is exploding and recession will hit us regardless what the central banks do. Just buy gold and silver… Who is gonna buy bonds when Trump wanna kill the dollar and the bonds value will be hammered….
Andy
Paid propaganda … Look at USA’s huge debt … All made in China (why? because China commies offer no union, cheap labor, free infrastructure and cheap land lease, money laundry, etc. for the world scumbag capitalists from USA, Germany, France, UK, Japan). In 1971 Richard Nixon (I’m not a crook) ended the Bretton Woods System (US treasure bills back by gold) in order for US scumbag capitalists to do business with China. https://history.state.gov/milestones/1969-1976/nixon-shock
hugh brown
This guy has no clue where gold/silver are going, as fiat is going to 0.
Clarence Faraday
Why is this dumb article at the top of google news search ?
AHMAD SIDDIQI
Well that’s one writer I will never pay attention to. Just understand that Gold is back to where it belongs which is being the best monetary asset on the planet. For the next 10 years it will be wise to it go against Gold otherwise you will miss out on one of the most remarkable bull runs in history.
[email protected]
Bankster shills losing the propaganda war on metals.These type of fear porn articles are laughable
Goebells
As one reader stated apply the direct opposite to each conclusion and you have the truth.
These shills have no shame.lmao.They are going to lOse!!
DrGoebells
larry Paul Johnson
We share much in common.
The desperation exhibited by thes mainstream financial presstitutes is laughable.
Just imagine the rot within the current system if you were to peel back the onion skin.
If that ever happened we would have systemic change overnite. In addition I dear say the rope/hemp business would explode overnite..
Major systemic change is coming relatively soon ..have an escape plan..DONT rely on paper investments.You will be Screwed beyond a shadow of a doubt.