Dr Martin Mureenbeeld reminds clients that the 2% revaluation isn’t nearly going to satisfy the baying voices in Washington who want to pretend that but for China, every American would have a job; and only one mind you because it would pay so well.
Murenbeeld, renowned for his canny predictions, remains bullish on gold based on a revised forecasting model that has upweighted oil’s influence. He says oil is one of the more important factors tugging on the gold price.
Seen from the perspective of a Saudi oil merchant, there’s a potentially good trade underway. The cash proceeds from selling a barrel of oil buy more gold than at any time since WWII. Since this ratio swings about, it would hardly be imprudent to convert petrodollars into bullion.
From the vantage point of a gold miner, an ounce of gold buys precious little fuel for the mining fleet and processing plant, or the myriad oil derived and dependent ancillary products such as lubricants and tyres.
Murenbeeld says the medium term technical picture is “inconclusive”. Downside is seen at $415 and upside is $450. Murenbeeld & Associates recently issued a longer-range forecast for a fourth quarter gold price of $450 with a 25% probability of a run through $480.
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