There is an old joke, or perhaps you could call it sterling advice about making gold market (or any market) forecasts. If you predict a specific price, don’t tell your audience when it will happen. That way, you can never be proven wrong.
At least once each year, I don’t follow that advice. I write a weekly column called "Class of ’63" in Numismatic News. In recent years, I have used an end-of-the-year column to forecast where I think precious metals are going.
At the end of 2006, I forecast that gold would have a mild downturn in 2007 and close the year at $600 a troy ounce. At the close of 2006, gold was at $635.20.
That forecast looked like genius for about three days. Gold dropped down to $604.90 and since then has shot higher. It has been as high as $692 on April 20. My forecast still has more than half a year to run before you can determine whether I was right or wrong. We’ll see.
However, I bring this topic up this morning because of a conversation I had while I was in Long Beach, Calif. Last Wednesday night I was one of five people at dinner. ANA Gov. Michael Fey sat to my left. We conversed about a number of topics during the course of the evening. It was enjoyable.
At one point, he turns to me and asks where I thought gold was going. I replied that I thought it might go down a little. He said he thought it was going to go up. That was about it. Neither one of us elaborated and we were drawn back into the general table conversation.
What happened Thursday? Gold went up. What happened Friday? Gold went up. It rose $18.10 during those two days, closing at $671.20. Judging from my table conversation, I couldn’t have been more wrong. Judging from my annual column, I still have more than half a year of time left.
Check back with me at the end of December when I do my self-evaluation. At that point, I won’t be able to use timing as an excuse.