Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Closely followed gold market commentator Martin Murenbeeld – chief economist at Dundee Capital Markets – has issued his predictions for the price of the metal next year.
Murenbeeld’s outlook is bullish, although any gold price gains would be fairly modest: From an average of just over $1,200 in the first quarter 2015 gold is predicted to rise to $1,277 at the end of the year and back above $1,300 by Q2 2016.
Moreover, Murenbeeld thinks the gold market may be “finally turning” and the price could overshoot on the upside as quoted in MiningMx:
“We are more bullish than the actual numbers suggest, which results partly from the judgement that 2015 will see more financial and geopolitical fireworks.”
[..] crises present an unknown positive risk to the outlook: indeed it is very possible that the average gold price for 2015 will be higher than forecast (as happened in 2014) precisely because of the many crises looming on the horizon for 2015.”
Gold was having a bad start to the holiday season with February futures giving up 1.7% or more than $20 an ounce on Monday. In afternoon trade in New York an ounce of gold was exchanging hands for $1,175.90, levels last seen more than three weeks ago.
4 Comments
Earle Shoihet
Murenbeeeld is one of the best…gold is set to climb for many reasons: shorts will
tire and cover , world wide production will fall , Chindia will gobble up all the newly
mined production , and the Yanks will start buying. The gold ETF again and of course Janet Yellen will remain very accommodative …
Dr Stephen Nordstrom
Earle, I think your comment was more informative than the article.
Anopheles
Worldwide production isn’t going to fall much. Companies are trying to pump out more gold, not less. They need to make up total revenue shortfalls. The revenue will come at lower margins per oz.
High cost producers that might scale back are typically smaller mines, so won’t affect overall supply. Much like what is happening with iron ore. Prices have halved, but total, worldwide production is way up.
Global crises? Had them, and they are now old news. If anything, Russia will be dumping gold, not buying it. China economic projections are WAY down, so less disposable income, meaning less gold purchases.
Gold price next year? Not much changed from this year, I expect in the 1200’s but with fluctuations going much lower.
Bulldog007
I have watched the gold price for three decades and am getting used to its anomalous behaviour. My own opinion is that the only time we will see a definite surge is when the banksters and other central banks stop intervening and shorting the metal whenever it shows signs of life.