Star money manager Jeff Gundlach thinks gold is going to $1,400 and says the current chart pattern is indicative of a bottom. This call, however, was one Gundlach got wrong in 2015.LINK TO ARTICLE ON GUNDLACH’S MARKET FORECASTS
By contrast Bloomberg’s Top Gold Forecaster Barnabas Gan Sees Prices heading lower. According to Gan:
“The market may have started the year with a depressing note so far, but an eventual rosier 2016 will bring gold to new lows,” said Barnabas Gan, commodity economist for Oversea-Chinese Banking Corp. Ltd. (OCBC), in the bank’s commodity outlook report Wednesday 13th January… According to Gan, gold prices were pressured in 2015 not only by expectations for a U.S. Federal Reserve rate hike, which resulted in a stronger dollar, but also by lackluster physical demand from key markets like China and India... The “kingpin” for lower gold prices, according to Gan, is the prospect of higher U.S. rates in 2016, which would result in a stronger U.S. dollar, and a “rosy” global economic outlook…[W]e remain firm on our expectation for the U.S. Federal Reserve to hike interest rates, at least, by three more times this year to an eventual 1.25% print at end-year,” … “Should our expectations come to pass, gold prices are expected to stage another leg down to our forecast of $950/oz this year,”
Gan did note that if his expectations are incorrect and economic conditions worsen, he could see gold prices turn higher and touch $1,200 an ounce on safe-haven demand.
Steep equity market falls on January 14th and 15th support the view that three further Fed interest rates hikes this year are unlikely now. Further, if gold does spike down to $950, mine production will be uneconomic and supply will fall.