In 2011, Dylan Grice set a dubious world record. The French economist Société Générale said soberly in a September 2011 interview that the “fair value” of one ounce of gold is no less than $ 10,000. At the same time, the glass globe of Rob McEwen, also known as “Mister Gold” and founder of “Goldcorp”, indicated a target price of $ 5,000.
The fact that analysts’ forecasts are often far from reality is shown by the gold price forecasts issued by banks in recent years.
Analysts of the American Citigroup predict a course explosion to 6,000 dollar in analogy to the price development in the year 1980, when the gold price rose within within days from 500 to 850 dollar. The German analysts , on the other hand, held back: Deutsche Bank forecast a gold price of $ 2,000 per troy ounce by the end of 2011, Stabilitas Fonds GmbH landed at “more than $ 2,000” and Uwe Bergold, a fund manager at GR Asset Management , took on “German investor television” a bit more start – his price target was $ 3,000 by the end of the year.
Some key players in the gold market include:
- JP Morgan
- Goldman Sachs
- German bank
- Barclays Capital
- Credit Suisse
- Société Générale
- Royal Bank of Scotland
Gold Price Predictions – Glass Ball or Golden Future Prediction?
In an international comparison, the performance of the German analysts in the prognosis widening looked almost circle-class, but a look back makes it clear: even the cautious estimates were far from the actual rates, because gold ended the year 2011 at 1568 US dollars per troy ounce. However, although none of the estimates expressed were close to their actual value, gold price forecasts are standard in economic reporting.
And the market observers faced special challenges last year – the gold price slide in April 2013 caught many analysts on the wrong foot. In July 2013, when the gold price had passed its biggest slide in more than 30 years, many financial institutions adjusted their forecasts – for example, Citigroup predicted gold prices of $ 1,100 a troy ounce by the end of the year and Societe Generale tapped $ 1,159. Dollars until the end of the year. By comparison, the price of gold ended 2013 at just under $ 1200 per troy ounce. The analysts had therefore, after they were too optimistic for a long time, their expectations phrased even more pessimistic – and were also wrong.
Gold price forecasts of some major banks
According to Bloomberg (as of 23.10.2015), the current forecasts for 2016, 2017 and 2018 are as follows:
|Average (in USD)||$ 1140||$ 1209||$ 1230|
|Low (in USD)||$ 975||$ 950||$ 900|
|High (in USD)||$ 1359||$ 1470||$ 1473|
Source: Bloomberg (as of 23.10.2015)
The forecasts for 2015 looked bearish overall. Banks like Goldman Sachs also expected falling prices with an average gold price of $ 1050. The banks Citigroup with 1220 USD and the Commerzbank with 1200 USD are about equal in their expectations.
The above chart shows gold price forecasts for the year 2014. At the time of writing, the price of gold itself stood at $ 1,335 (as of March 2014). After the professionals were overly optimistic in the past two years, the 2014 forecasts were the opposite.
More analysts and their gold forecasts at a glance
|René Hochreiter||Allan Hochreiter (Pty)||$ 1,150||$ 1,600||$ 1,650|
|Bhargava Vaidya||BN Vaidya & Associates||$ 1,235||$ 1,670||$ 1,600|
|Michael Widmer||BAML||–||–||$ 1,850|
|Suki Cooper||Barclays Capital||$ 1,205||$ 1,778||$ 1,875|
|Anne-Laure Tremblay / Stephen Briggs||BNP Paribas||$ 1,095||$ 1,865||$ 1,775|
|Carsten Fritsch||Commerzbank||$ 1,300||–||–|
|Rohit Savant||CPM Group||$ 1,250||$ 1,658||$ 1,612|
|Mitul Kotecha||Credit Agricole||$ 1,105||$ 1,650||–|
|Tom Kendall||Credit Suisse Securities (Europe)||$ 1,080||$ 1,740||$ 1,755|
|Wolfgang Wrzesniok-Rossbach||Degussa gold trade||$ 1,315||–||$ 1,750|
|Daniel Brebner||German bank||–||$ 1,860||$ 1,825|
|Martin Murenbeeld||Dundee Wealth Economics||$ 1,250||$ 1,768||$ 1,835|
|William Adams||Fast Markets||$ 1,260||$ 1,765||$ 1,785|
|Alexander Zumpfe / Sonia Hellweg||Heraeus||$ 1,305||$ 1,751||–|
|James Steel||HSBC||$ 1,292||$ 1,760||$ 1,850|
|Jeffrey Rhodes / Edward Meir||INTL Commodities||$ 1,165||$ 1,727||$ 1,727|
|Michael Jansen||JPMorgan Securities||–||–||$ 1,869|
|Thorsten Proettel||LBBW||$ 1,210||$ 1,745||$ 1,640|
|Bayram Dincer||LGT Capital Management||–||–||$ 1,770|
|Matthew Turner / Jonathan Butler||Mitsubishi Corporation International (Europe)||$ 1,245||–||$ 1,782|
|David Jollie||Mitsui & Co Precious Metals Inc||$ 1,280||$ 1,785||$ 1,770|
|Frederic Panizzutti||MKS (Switzerland)||$ 1,262||$ 1,753||$ 1,808|
|Peter Done||QCR Quantitative Commodity Research||$ 1,260||$ 1,775||$ 1,730|
|Ross Norman||Sharp’s Pixley||$ 1,274||$ 1,736||$ 1,765|
|Robin Bhar||Societe Generale||$ 1,135||$ 1,700||–|
|Daniel Smith||Standard Chartered Bank||–||–||$ 1,875|
|Eddie Nagao||Sumitomo Corporation||$ 1,275||$ 1,600||$ 1,525|
|Bart Melek||TD Securities||$ 1,175||$ 1,895||–|
|Philip Klapwijk||Thomson Reuters GMS||$ 1,176||$ 1,847||$ 1,760|
|Joni Teves / Edel Tully||UBS||$ 1,200||$ 1,900||$ 2,050|
|Carl Firman||VM Group||–||–||$ 1,689|
|Actual average price?||$ 1,411||$ 1,669|
Source: Annual gold price forecasts of members of the London Bullion Market Association
Some banks and analysts are indeed already on forecasts for the year 2015 and the coming years travel. In the overview, however, the values are rather a mixed bullish-bearish picture, which shows no tendencies. It therefore makes little sense to report numbers here at the present time.
Motivation of analysts and gold forecasts
In general, every gold price forecast should be checked for the motivation of its creator. So it is not surprising that in particular such companies name particularly high numbers who sell even gold or exchange-traded gold-based securities. Equally predictable is the motivation of players such as ” Goldman Sachs, ” who have repeatedly pushed the price of gold through pessimistic forecasts, before covering the market. Recent example: Goldman Sachs acquired shares in the world’s largest gold exchange-traded fund, SPDR Gold Trust (GLD), for $ 77.2 million in the final quarter of 2013, increasing its stake by a whopping 21 percent, despite commodity analysts Bank continues to believe the gold price will fall to $ 1050 by the end of 2014. So, the bank has practically resorted to a falling knife – or just tactfully chanted a swan on gold in order to realize the highest possible value gains?
Therefore, it is worth taking a look at the subordinate rates in the gold price forecasts – many market observers simply do not substantiate their values, so that the suspicion arises that the sensational estimate is merely an excuse to attract attention in the daily press. Demanding forecasts, on the other hand, refer to fundamental market data or use the methods of the chart technology with trend channels as well as psychologically important limit values.
The sentiment in the precious metal market is starting to turn around – the first banks have started to correct their gold price forecasts in February 2014: “We have seen the bottom in gold and silver and I am optimistic about future price developments, ” explained, for example a representative of Commerzbank. UBS Bank has raised its gold price forecasts, with the price target now at $ 1280, up $ 100 over the original one month. In three months, the gold price should be even at 1350 dollars. As a reminder: Currently, the gold price is already at 1330 US dollars. “Gold has begun to shed its bad reputation,” says the UBS study. The technical analysts at Citi Futures have identified gold for development potential up to $ 1,400. Most analysts expect slightly rising prices.
Gold price forecasts do not know “wisdom of the many”
Even after a long period of consideration over several years, however, it becomes clear that the “wisdom of the many” does not exist – at least in the gold market . To test the quality of the forecasts , the London Bullion Market Association conducts an annual survey – it polls a number of reputable analysts from major banks and consultancies for their gold price forecasts and awards the winner at the end of the year. However, hardly any prognosis was priced – between 2008 and 2011, the mean values predicted by the LBMA were five percent below the actual rates. The average forecast for 2012 was 5 percent too high, while it was even 25 percent too bullish the following year. And in the new year, it looks as if the experts have shot past the target again: they assume that the price of gold in 2014 will slide to 1219 dollars per troy ounce. So far, however, the gold price makes no move to confirm the experts.
In summary, from the retrospective consideration of the forecasts for future Gopld price development, it can be seen that banks and analysts were often very far removed from actual developments (both up and down). The actual forecasts seem to have been made in reality rather according to the respective positioning. Are banks at the gold market z. Underinvestment, for example, are called low forecasts, while banks holding very high own gold holdings, derivatives, etc. are more likely to forecast higher gold targets.