No doubt Skol you would be cheering the gold price forecast I heard last night on Sky Business.
One of the analysts told us that Morgans has predicted US$743.00 (note that gold price to the exact 3 dollars!!)
The reasons given.
1. The strengthening US economic recovery. (Conveniently forgot to mention that the US consumer is tapped out and US consumer spending declined in July. Conveniently forgot to mention US job growth is based on US full time jobs being replaced with part time jobs.)
2. Rising US interest rates will lead to a strengthening US dollar. (Conveniently forgot to mention what rising US interest rates will do to an economy drugged in cheap money and drowning in debt.)
3. Of course US$743.00 is completely divorced from economic reality when it costs many hundreds of dollars more to get an ounce of gold out of the ground.
4. One of the Sky Business analysts also pointed out that US$743.00 won't be bad for Australian based gold producers as the Australian dollar will have also declined to 70 cents and told us that he had got his calculator out and worked out that in Australian dollars the price would be $1260, which he added was not much different to now. Try over A$100 which is very significant in view of the phenomenally thin margins the lowest cost Australian producers are operating on. However, it's a pity he couldn't have worked out something as simple as US$743.00 with an Australian dollar at 70 cents is NOT A$1260 as he told us, but just A$1060.
