The rally in gold prices has driven several analysts and famous investors (Jim Rogers in particular) to frenzied forecasts in recent days. Some say gold prices will reach $2,000 per ounce soon. Others are predicting a big boom (sounds familiar?), saying gold prices will zoom to $5,000 and eventually to even $15,000 per ounce in the years to come. For instance, Jim Rogers is saying gold will top $2,000, possibly go even as high as $10,000 per ounce in the next few years. Have we already forgotten about the housing bubble?
As far as I know, there has been no economic shift on the demand or supply for gold. Nevertheless, the price has increased incredibly on the speculation of greater inflation in the future. A sign of the gold rush is the US Mint. Earlier this month, the Mint ended the sale of 2009 American Gold Buffalo Bullion Coins, telling customers in a memo that its inventory has been depleted and that no more of the coins would be produced.
Put simply, we think Jim Rogers is incorrect. Although we’re not sure what the future will hold, we believe the probability of lower gold prices in the future is higher than ever – just see the commercials below.
Happy New Year everyone!