Gold Supply Likely to Swamp Demand (prediction of price drop to $550 by 2007)

TheStreet.com ^ | 10/29/2006 | Simon Constable

[Proud_USA_Republican]

An increasing surplus of bullion relative to demand could mean bad news for gold bulls, if the predictions of a new report prove accurate.

Although the supply of gold looks set to drop by 159 metric tons for 2007, demand will plummet even faster, lower by 313 tons when compared to revised estimates for the whole of 2006, according to a new study scheduled for publishing Monday morning by Fortis Bank. The report was authored by a team of analysts led by veteran gold market watcher Jessica Cross, CEO at Virtual Metals, a London-based specialty consulting firm.

Gold prices will likely fall to $580 an ounce by year-end and then to around $550 in 2007, says Matt Turner, commodities analyst at Virtual Metals and a co-author of the report. "A lot will depend on the dollar," he cautions, noting that a weaker greenback could bolster prices.

Turner's forecast compares with a spot price of $596.25 an ounce recorded Friday afternoon by the London Bullion Market Association and a multi-year high of $725.25 reached May 12. Many highly respected gold analysts who have been calling for a fall rally beyond the May high, and perhaps even above $800, may find the new report sobering.

[Freedom4US]

I agree with you, but regardless of *why*, including manipulation, gold has been a poor investment during times of real crisis as of late, that's all.

[Herakles]

one of my gold stocks is 400% higher that it was in 2000; almost 90% higher than what it was in May of 05.

$400% in 6 years is not too bad.

Oddly enough, gold's bottom was around 2000; shortly after that, the conservative republicans I elected into office started printing funny money out the wazzoo!

[AdamSelene235]

Apparent world gold supply down 17% as mine production plus hedging falls

[roaddog727]

Gold was over priced @ $375.00 per ounce.

I would not be surprised to see it drop back to those levels over the nex year or so.

[RightWhale]

Commodities have reached their pullback lows. It's up for everything now and for a while. Too bad gold has next to zero actual value except for gilding domes or it would participate more fully in the upcoming and just started commodity price increases. 634 is over-enthusiastic and the result of the glum-bear on the Art Bell Show last night.

[hosepipe]

[ The only thing I don't understand is why is he so eager to sell me the gold he owns just before the price skyrockets? ]

LoL...