Difference between gold forecast and the actual gold priceBased on a short analysis of bank forecasts, we can conclude they are clueless about the direction of the gold price.
This year, the difference between the average gold price and the predicted gold price for 2014 is already $75 per troy ounce
, as you can see from the chart below. It seems like bank analysts tend to extrapolate past returns. They were too optimistic in early 2013 and they seem to be too pessimistic on gold right now.


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Submitted by Market Update:

Last year we already gathered some forecasts by a number of big commercial banks and now we’ve added the most recent forecasts for 2014. Early 2013, when the gold price was about $1.650 per troy ounce, almost all banks expected prices would rise to $1.800 or even more dollars per troy ounce. Deutsche Bank and Merrill Lynch even expected the price would reach or surpass $2.000 per troy ounce in 2013. The lowest forecast was still $1.650 per troy ounce, so basically none of these banks expected the drop in price we saw last year.

Gold price forecasts by ten different banks through time

Gold price forecasts by ten different banks through time

Bank analysts extrapolate past gold returns?

After the violent price drop of gold in the first half of 2013, many banks slashed their forecasts for both 2013 and 2014. The red and green bars in the graph show the sudden adjustment to the new reality. Compared to just one year ago, banks slashed their forecasts by hundreds of dollars. For 2014, these banks expect a further price drop to on average $1.187 per troy ounce. That’s as low as the 2013 bottom!

Contrary to what most banks expected, the yellow metal made a nice rebound in early 2014. This year, the price of gold has already gained more than 10% and surpassed the 200 day moving average. This year, the difference between the average gold price and the predicted gold price for 2014 is already $75 per troy ounce, as you can see from the chart below. It seems like bank analysts tend to extrapolate past returns. They were too optimistic in early 2013 and they seem to be too pessimistic on gold right now.

Difference between gold forecast and the actual gold price

Difference between gold forecast and the actual gold price


  1. I wish someone would talk about how actual paper pm toilet paper in created an where it ends. First of all how is it made and from what. And when they sell it dump it on the comex 4 semiloads of it in 4 seconds. What actually takes place. And when it exspires the put contracts does it simply evaporate. or do they get to use it again for another mega flushing  if they made money on the contracts. An to who actually made money on the put options when there plan always worked????????????????????????????????????????????????????????? Some one till me please.

  2. bankers are brain damaged low IQ morons who couldn’t pour piss out of a boot if the instructions were printed on the heel
    If it weren’t for the government bailing out the TBTF banks periodically, they’ll all be sitting at the side of the road with a sign saying “Will work for food”
    If you want to make a small fortune in the banking business start out with a large one. 
    Morons equally dangerous to themselves as well as others.
    A fool and his money are soon parted if he gets to close to a banker.
    BTW  another ‘banker’ left the room.  A 28 year old woman, Autumn Radtke, with bitcoin firm First Meta of Singapore, committed suicide
    That counts in the BANKER DEAL POOL  
    By my count that makes 2 since Feb 18. I may consider the Scottdale banker as #3 if more intel comes forth.

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