Back at the start of January this year, just about a whole quarter ago I published the varying opinions that gold prices would go in 2014 produced by analysts in the most reputable banking institutions. But who was right? Who was wrong? And can gold actually be predicted?
Following 2013’s collapse of the gold market, rise of the stocks, and the truly phenomenal roller coaster that is bitcoin, gold is no longer seen as a safe haven for investments and the game is definitely changing. Instead, we have seen gold drop from an all-time high of around $1,900 in 2011 to the market implosion in 2013 where it bottomed out to $1,200. At year end people realised that things were changing for gold and analysts all had a combination of bearish and bullish opinions about where the metal would go moving forward. I collected the contrasting views from the major banks and now we are in the second quarter of the year it’s quite interesting to see who has been right so far and look at where things look like they’re going.
So far the more bullish predictions have been correct with Merrill Lynch leading that pack with a predicted average of $1,294 throughout the year, so far that’s spot on. Barclays haven’t done badly either predicting $1,350 average in the first quarter, although it has proven slightly bullish. Commerzbank predict $1,400 by the end of the year so we will have to wait and see if their overall prediction is correct.
UBS also released a $1,200 annual forecast over the year but so far we have only touched that low briefly twice this year. Societe Generale had by far the worst prediction estimating a Q1 2014 average price of just $1,050 and we haven’t come nearly close to that level.
With an average price hovering around $1,300 we have experienced resistance at just under $1,400 and support at $1,200. It looks like gold will be stabilising around this level for now. Interestingly some of the big names appear to have got it a little wrong so far with a little too much pessimism; let’s see how the rest of the year pans out.