In Commodity News 07/04/2015
Having watched gold prices swing wildly on weak and strong economic data from the United States to the Euro zone countries, I am courageous enough to predict where the yellow metal prices are headed in the next one year to 10 years.
Straightly put, I see gold prices crashing below $1000 an ounce in the next one year.
Having fallen below $1000 an ounce, gold prices will remain bearish for the next two years, before the glitter slowly returns to boost the prices.
Gold prices would, then, start climbing above $1000 an ounce, going up and up, as demand for the yellow metal rises globally thanks to worsening economic conditions around the world.
By the year 2020, gold prices should reach $2000 per ounce, and the surge would not be limited there. Gold prices should boom to a record of $3000 an ounce by the year 2025, which is exactly 10 years from now.
You would ask what is the reasoning behind my argument that gold prices would first crash below $1000 an ounce before surging to the historic high of $3000 an ounce in 10 years.
First, I would talk about the crash of gold prices below $1000 an ounce.
After years of a commodities boom cycle, the world is now passing through a bust cycle in commodities. Commodity prices from crude oil, agricultural, metals and minerals are all down. The bearish sentiment in commodity prices is reflecting on gold, which is passing through the $1200 an ounce barometer these days.
Demand for gold is down because there is less appetite for the yellow metal from the largest consuming nations like China and India. But it is a passing phase brought about by the muted economic growth that China is passing through these days.
The Chinese economy is not booming as it was some years back. The Chinese economy looks tired, as growth parameters are not met often, even though there were predictions that China would overtake the United States as the largest economy in the world soon.
Better than expected economic data from the United States is pushing back gold prices.
But the dull moments in the Asian economic growth story will pass through the testing times soon.
In the next two years, Asian economy led by China and India are expected to perform better than some of the developed nations.
Demand for gold will start picking up from 2017, when gold prices would move up the $1000 an ounce mark, and travel towards the bullish phase of $2000.
Gold will be unstoppable once it touches $2000 an ounce by 2020.
Insatiable demand for gold from the investing community in Asia, especially in China and India, will lead to the great bull run of gold taking the yellow metal prices to $3000 an ounce by the year 2025.