LBMA experts gold price forecasts for 2010 look for $1,394 high and $1,199 average

As a conservative predictor of gold price trends, the LBMA's annual poll of experts in the field is looking for further increases in 2010.

LONDON - 

This year the London Bullion Market Association (LBMA)'s precious metals prices poll of analysts, traders and bankers' is possibly more bullish than it has tended to be in the past few years, but again less optimistic than Mineweb readers as expressed in our gold price prediction competition to date.  This year twenty-six participants took part in the LBMA poll and for gold predicted a price high, on average, of $1,394, a low of $983 and an average price over the year of $1,199.  Indeed one of the participants, David Wilson of Societe Generale is looking for a high of $1,650 and an average of $1,388.  Every single entrant is looking for the gold price to achieve a high during the year above last year's peak, but given most of the entries were almost certainly sent in before the falls in late December, perhaps this isn't too surprising.

Last year, the price high fell almost halfway between that predicted by Mineweb readers and the LBMA forecasts so if we take that as a guide perhaps we should be looking for a peak of around $1480 this year - incidentally exactly the level forecast by this writer in the Mineweb competition!  One lives in hope!

Predicting the gold price is far from an exact science and if one is too far out one hopes that rash forecasts are mired in the mists of time.  One year is a long period in the price prediction business.  Much will depend on the performance of the dollar and many analysts are still anticipating continuing weakness in the greenback during the year, notwithstanding recent reported Chinese comments that the dollar has probably reached its bottom.  Given this statement was made on a day that China announced a tightening of its monetary policy, while the U.S. economy is only sending mixed signals about recovery, this looks to be an assessment which is deemed politically expedient by the Chinese to try and give them more breathing space in diversifying out of their huge dollar holdings in the months and years ahead.

Gold has been in a bull run for the best part of ten years - or perhaps it is that the dollar has been mostly in a bear trend over the same period - and at the moment there is little sign of either tendency ending.  This suggests that gold will still continue to at least remain strong during the current year. 

Whatever the Roubinis of this world say about gold's lack of intrinsic value, its psychological value as a wealth protector has more than stood the test of time.  With the East becoming the global powerhouse (both China and India's automobile outputs have outstripped that in the U.S. over the past year which has to be a sign, not that the old order is changing, but that it already has) and the propensity to treat gold as both an overt indicator of success and as an insurance policy in that part of the World, then Keynesian and Roubinian assessments of gold's value will carry ever less and less weight.

Meanwhile, Mineweb's own gold price forecasting competition closes in nine days time, so if you are interested in setting your forecasting abilities against those of your peers - and against the experts, do take part.  Send your entries on an email to editor@mineweb.com.  Please submit them in the following format to help us get the entries entered into the spreadsheet correctly:

Name or Pseudonym:

High Price:

Low Price:

Year End Price:

Average Price:

June 30 Price:

Contact email address:

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MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

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