Last Friday gold hit $1362 for a few minutes in the wee-hours of trading. In what is perhaps adjusting for inflation, even though he is a “Deflationist”, Harry Dent has a new gold forecast and 13 reasons to back it up…

by Harry Dent originally posted at Economy and Markets

Hi, I’m Harry Dent,

A Harvard-trained economist and bestselling author. I’ve made my name by using my market analysis to give great insight into the upcoming – and potentially devastating – economic trends.

The accuracy of my research has proven to be very helpful for enthusiastic investors looking to make the most profitable investment decisions.

One topic I am asked about on a daily basis, is gold. “What’s going to happen to gold prices? Should we be gold bugs or gold bears?” That’s what I always hear.

The oddest part about all this is that gold is not something people want to discuss objectively. It seems most people want to either defend it or crucify it… there’s little middle ground.

That’s a problem, because it’s difficult to be a successful investor if you look at each opportunity with a foregone conclusion. And that’s why I am NOT a gold-lover. Nor am I a gold-hater.

What I am is an observer of economies, markets and trends. And those observations are clearly signaling that gold prices could melt down (pun intended) to as low as $700 in the years ahead.

I know that’s a bold prediction, but it’s based on 35 years of research, during which I studied every major economic bubble of the last four centuries. And what I learned from that pioneering analysis is very simple:

1) Gold prices follow very distinct trajectories during financial booms and busts.

2) Gold prices are predictably impacted by inflation and deflation.

So why should you listen to my research when there are others saying that gold will always be a safe and secure investment? I’ll let my track record speak for itself.

Over the last 25 years, I’ve predicted nearly every major economic boom and bust…

In my 1989 book, Our Power to Predict, I foretold of the economic collapse that hit Japan in 1990.

Then in The Great Boom Ahead, I predicted America’s completely unanticipated boom at the end of the 20th century.

In February of 2000 — at the exact moment the tech bubble peaked — I released an alert to my Economy & Markets readers, warning them to get out of Internet stocks.

And in 2011 — months before the euro zone crisis began — I sounded the alarm of the coming European fiscal nightmare.

Each time, the “experts” said I was wrong. Each time, I was exactly right.

So when I see unmistakable signs of gold’s direction during the next few years, it’s not just guesswork.

What Will the Gold Price be in a Year?

The price of gold depends on a lot of things. It is a combination of what’s happening with monetary and credit expansion and whatever you think the value should be.

Credit and monetary expansion are easy. If they’re growing, the price of gold in dollars or euros or whatever should move up. In other words: gold up.

The “whatever you think the price of gold should be” is the hard part. And this is where people get angry.

We often hear the gold bugs cry: “Gold should be $5,000 per ounce, because our government is killing the currency!”

At the same time, the gold bears shout: “Gold should be priced for its use as jewelry — around $100 per ounce — because it is not part of the monetary system.”

But there’s a third option. Instead of gold being priced too high or too low, can’t it be a fluctuating barometer of current demand and views, exacerbated by ETFs, like GLD?

It’s not gold up all of the time. And it’s not gold down all of the time, either.

In the early years of the current climate, which we call the Economic Winter Season, the gold price rose sharply in response to fears about collapse.

Eventually, that story grew long in the tooth. This doesn’t mean investors no longer fear economic collapse or upheaval. It just means we’ve lived with it for so long that it’s become normal.

So this leaves us in the mushy middle. Gold has already dropped sharply. Now it hovers in no-man’s land. So what’s next?

As I said before, our view is that gold will continue to melt down, all the way to $700, if not lower because of the great economic crash we forecast for this year.

There are at least 13 different triggers that could cause the next collaps. Regardless, the result will be continued frustration for gold bugs as their beloved yellow metal steadily collapses.

Our suggestion? Sell your gold investments!

As far as your physical gold goes — the gold that sits in storage for no purpose other than to provide you with peace of mind — that’s for you to do with what you will. But non-physical investments related to gold are an entirely different matter…

Get much more information on how to prepare for the gold bust ahead in my latest report: Gold Will Fall to 700/oz!

 

    • That was a very interesting look into the case against gold. In that entire piece he managed not to give a single actual argument against gold ownership. For me it was like the Big Short scene where they go to Florida to check out the integrity of the housing market.

      Recent developments in the pro gold argument … Adrew McGuires substantiated claim that GSachs may have broken ranks with the Banking Cartel. Maybe this is to aid China in gold acquisition for the SGEI and a coming petroYuan. Likewise Goldmanites Gary Cohn soon to jump ship and Stan Fisher jumping ship.

      In Canada Britain and Europe..Goldmanite Central Bankers seem to be letting their currencies rise against the USD.

      If the Goldman rates are skadaddling maybe soon the rest of us in muppetworld will follow their lead.

    • Andrew McQuire is a moron and completely full of crap.  His interviews where he talks about “massive sovereign buying” are a sell signal.   The COT report says gold is overbought.  That is the only clue for trading.  It could stay that way, or it could sell off like it always does.  Nothing Dent or McQuire say means anything.  They are both idiots.  Think about this for a second:  How could McQuire possibly know any of the things he claims to know about what large funds or government’s are doing?  There is no possible way he could know who is buying what.  Ziltch.  Nada.  Not possible.  As far as Dent goes, he is just a moron that doesn’t know anything about markets.  He doesn’t follow them or understand them.  He just says stupid nonsense.

    • McGuire obviously isn’t a moron . He is an accomplished gold trader who shares with us an intricate look into the gold market.

      Neither is he full of crap. He engaged the CFTC and described to them an ongoing case of manipulation in the silver market. Then he guided Bill Murphy thru the CFTC hearing on manipulation in 2010 which I watched live. Then he was the victim of an attempted hit and run.

      McGuire is a committed courageous and intelligent spokesperson for our community and deserves our gratitude.

    • Holo….

      “Andrew McGuire is a Moron”?

      I will have to file that comment away under the “Can I have purchase a clue for 200 Alex”.

      The paper farce is falling apart at the seams now.  The manipulated paper prices of gold and silver are all but toast.

      The physical market for silver is so incredibly tiny and the gold physical demand is about to swallow up the paper scam.  Stevie Wonder can see what is coming.

      Much, much higher physical prices.

       

    • @ Strannick @ HolodinaVoinya
      If you want your comments to be effective then it’s a good idea to identify the target correctly.
      The name is Andrew Maguire.

      In my book the man is full of obfuscation.   He’s a snake-oil salesman using technical jargon to sell himself and to wrong foot the market.

      He’s a self admitted trader.   No trader is going to broadcast his true intentions to his competitors in a KWN interview.   In fact I would expect him to do the opposite.

    • @Strannik and @RNSTK  I stand by exactly what I said about MacQuire.  He is a liar and completely full of shit.  There is NO POSSIBLE WAY he could know who is buying what.  He is simply lying to get people to join his service.  If he bought every time he said “massive sovereign buying”, in a sad attempt to pump his service, he would be broke.  I use this guy as a counter indicator with 100% success.  He simply sucks balls, and shows no indication of having any talent at all.

      I am not selling you anything.  He is.   Between the COT report and Macquire shooting his mouth off chasing the top again, I am pretty sure this run is over in paper.  If you take that guy’s advice, or defend him, knowing his history, you deserve exactly what you get.

  1. Methinks Harry Dent has dented his head. Possible a lead bar fell out of the sky and put quite the depression in his skull. Anything is possible. However, even if gold fell to $700.00, I sure gasoline would only be around $1.25 a gallon. So, there ya are! Yay’s! Nay’s! Or perhaps an expert to chime in?

  2. “Hi, I’m Harry Dent”

    So just who is Harry Dent? (anyways, who gives a rat’s ass?)  He’s more than happy to tell you.

    1. I’ve made my name by using my………..
    2. I am asked about on a daily basis………
    3. what I always hear………….
    4. I am NOT a gold-lover………..
    5. Nor am I a gold-hater……….
    6. I am is an observer of economies…………..
    7. I know that’s a bold……….
    8. I learned from that pioneering…………
    9. I’ll let my track record……………
    10. I’ve predicted nearly every major economic………..
    11. I foretold of the economic…………
    12. I predicted America’s completely………….
    13. I released an alert………….
    14. I sounded the alarm…………
    15. I was exactly right…………..
    16. I see unmistakable signs…………
    17. I said before……….

    Harry, before you commit pen to paper again, please set the mirror down and back away.

  3. In the last paragraph he implies that his statements refer to non physical investments and therefore do not apply to physical gold.  In the body of the article he conflates paper gold and physical gold.

  4. How about if I don’t sell my Gold and if Dent is right I stack more at that juncture?  I’m not ignoring Dent’s track record either.  Hey you can’t tar and feather someone for making a gutsy call like that. More Silver.

    • @andrew james

       

      It is not a lack of guts that brings forth the cat-calls about all these metals predictions but the almost complete lack of accuracy in them.  All of the PM prognosticators have stepped up and given us their best guesses as to what is most likely to happen but few of them have come even close to reality.

      Unlike them, I KNOW that I don’t know the future, so don’t waste time making predictions about something about which I don’t know anything… and I know just as much / little about the future as anyone else.  lol

       

    • Great comment Ed_B.  Your comment shows exceptional wisdom (and good grammar).  If anyone, including Mr. Dent, were as smart as he thinks he is, would he bother writing articles like this?  He could just buy some Put options on GLD and go play golf.  I have about 10% of my net worth in PMs, mainly because I, like you, have no idea what will happen in the future.  Mr. Dent does have some interesting thoughts on demographic-based trends, like baby boomers getting to the age where they are pretty much finished acquiring things, which doesn’t bode well for retailers.  Gen Xers want more stuff but can’t afford it, whereas baby boomers can afford it but don’t want it.  Once the BBers start dying and leaving their money to the kids, the economy will pick up.  To me, that makes sense, so maybe he’s not completely wrong about everything.

  5. I would say Dent is wrong if he thinks paper gold ETFs, futures, will reach $700 and stop there. PAPER GOLD will go to ZERO, 100% deflation for a worthless representation of gold. Same for silver, of course. But paper silver may smash the wall first as it is such a small physical market. So, Harry just made himself correct if you read his fine print. $700 physical gold? Maybe… with a $5,000-$10,000 premium.

  6. Hairy Dent is outrageous at predicting potential scenarios without evidence to support any of it.

    His demographics have some merit but his casual extrapolations don’t connect the facts.

    Nevertheless he is a hoot to listen to, just don’t take his advice. But if you must oh well.

  7. Harry just predicted that gold would rise 75% above his previous prediction which also means the tolerance (error) he gives to his predictive ability is +/- 75% (as he hasn’t conceeded he was wrong the difference must represent a tolerance) so he could be predicting a fall to $1225 from now!

    I think Harry’s economics/finance runs on rails.  If the real economy does so he could well be right.  If of course the train is leaving the rails then his economics will too.  That is really what PMs are all about right now.  They are a safe haven bet that the bankers, economists and politicians have got it wrong and will continue to get it wrong.  To me that is a safe bet.

    Yes in an extreme deflationary environment gold could and probably would plummet (in a free market, so price suppression would not be needed) but how much deflation could the financial system take before it’s game over?  10%?  I doubt it.

  8. The 3 MOST important things, regarding the valuation of gold, are being forgotten here…

    1. Gold has been an integral part of tribes’, kingdoms’, and nations’ economies, the world over, since the beginning of modern human civilization (5000+ years), and that isn’t going to change because some (probably) paid-off group of  msm, fiat paper loving, Goldman Sachs/Federal Reserve “analysts“, *thinks gold isn’t worth what it is.

    2. This is the most important point… As long as gold is held by the central banks of nations, the world over, and can be used to pay debts, gold will *ALWAYS* have a significant per ounce (troy) value. The central banks of the world hold approx 32,000 tonnes of it, which is valued at ~ $1.368 trillion (at $1,330/oz.t, with 32,150 oz.t per tonne). I know the US does not have the gold it claims, but China has significantly more than it claims, so it should somewhat balance out…

    3. If the US doesn’t have any gold, and 99+% of their brainless, idiot, lemming, general population (along with the population of most of the western countries) thinks that their paper Federal Reserve dollars or BOC, BOJ, ECB currencies, are more valuable, that’s fine…Nobody f***ing cares. The billions of people in the East and those in the US, Canada and rest of the western countries, that can see what is really going on, will gladly buy up *ANY supply of gold (and especially silver) available.

    These three reasons are why I *know gold (and silver) will always be valuable, as long as fiat currency is continuously being devalued and systematically depreciated (intentionally), by governments, central banks and investment banks, while being suppressed by these idiots in the msm, these bimbos and bozos and these f***ing charlatan “analysts”…

    Get prepared for a meltdown, it’s less than a year away…

  9. So what is it exactly?? Keep hearing that gold is not a hedge against inflation, it’s also not a hedge against deflation according to harry sack, so what is it exactly?

    If it does go to $700 then I guess that means people will be able to buy houses for $200K then right harry nut sack?

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