Brent crude prices, the benchmark for half the world’s oil, will weaken for a second year in 2014 as U.S. output expands and threats to Middle East and North African supply ease, the most-accurate forecasters said.
In today’s essay we look at three gold-related charts, each will tell a different story about gold’s performance, but ultimately, they will all point in the same direction – the direction of another move lower in the price of gold.
Even with OPEC forecast to keep its output quota unchanged at a meeting this week, falling oil demand and prospects for increased supply from some member states mean the group’s leader, Saudi Arabia, will have to cut production anyway.
Gold, iron ore, soybeans and copper will probably drop at least 15% next year as commodities face increased downside risks even as economic growth in the U.S. accelerates, according to Goldman Sachs Group Inc.
Gold will drop in each of the next four quarters and reach a four-year low as reduced U.S. stimulus in response to faster economic growth curbs demand for bullion as a haven, the most accurate forecasters said.
A direct comparison between gold and currencies has two important functions: It allows economists to compare sound money with fiat currency for the purpose of monetary analysis, and it allows us to adjust the price of gold in dollars.
Commodity demand in China, the world’s largest user of iron ore, copper and tin, will rebound through the end of the year as infrastructure projects gather pace and users restock, according to Goldman Sachs Group Inc.