Gold was treading water on Thursday ahead of the release of key economic data in the US exchanging hands for a shade under $1,370 an ounce, not far off two-year highs. Year to date the metal has gained almost 30% or more than $300 an ounce.
The metal’s good run year to date – one of the best performances in decades – has surprised many analysts (and even surpassed some fervent gold bugs’ expectations).
The 2016 entries for the London Bullion Market Association long running forecasting competition show just how bearish the consensus view was at the beginning of the year.
The majority of investment and institutional analysts predicted gold would dip below $1,000 during the course of the year. The winner of last year’s competition Bernard Dahdah of French investment bank Natixis, even predicted an average price in triple digits.
On the upside only five forecasters expected gold at $1,300 and only Martin Murenbeeld of BC-based Dundee Economics saw the price reaching today’s levels.
Of course, gold bulls’ hopes can still be dashed before the year is out and predicting the value of bullion a year in advance is always going to be tricky, but a new consensus seems to have formed in recent weeks.
Some of the big bullion banks including UBS now sees $1,400 before the end of the year (that’s Dahdah’s revised prediction too.) while Credit Suisse and BofA Merrill Lynch have it even higher at $1,500 going into 2017. Dutch bank ABN Amro, another erstwhile ultra-bearish house, revised its forecast to $1,425, adding that a Trump presidency could really see things explode.