Martin Murenbeeld
(post by tanoose on SH)
SEVERE EDIT
Murenbeeld comes at it from the academic side but he’s been amazingly accurate with his gold prognostications.
Gold price could soar to $700/oz this year: analyst
Zurich, Switzerland (Platts)--26Apr2006
The gold market rally will continue and the metal's price could finish out 2006 at or above $700/oz, said Canadian analyst Martin Murenbeeld Wednesday at the Denver Gold Group's annual European Gold Forum in Zurich.
The likeliest price scenario would see gold's
2006 average price at $637/oz,
a year-end price of $728/oz,
and a 2007 average price of $789,
Murenbeeld said.
A year ago he predicted a 2005 average of $440/oz, and the actual average was $444/oz.
While the US dollar fared reasonably well in 2005 against other currencies, it is due for a downside correction of between 15% and 25%, said Murenbeeld.
"The fourth quarter 2005 current account deficit was over 7% of GDP.
This throws nearly $4 billion a day into foreign exchange markets. This $4 billion has to be absorbed; if not, the dollar falls."
Because of dollar inflation over the past decades, the gold price has just recently caught up to its 25-year average when valued in constant dollars, according to Murenbeeld.
He added: "Gold is also very cheap in terms of oil. It takes less than 9 barrels of oil today to buy one ounce of gold, not an average of 17.5 barrels. If gold was priced at its average oil price, the gold price would be above $1,000/oz."
Nick J. Holland, CFO of South Africa's Gold Fields also forecast a year-end gold price of $700/oz in 2006. He said he doubted whether the Rand would weaken against the dollar this year.
--David Bond; newseditor@platts.com
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