Over the last two years, we’ve seen strong demand for gold out of Asia. All of this sucked all the readily available gold out of the west, and it’s tightened the market up.
The Brexit will add up more people coming in looking for gold, and they will find that it’s not there, therefore, gold has the potential to rally quite strongly, and it looks like we could see gold at the $1500 per ounce mark by the end of the year, or at the most by the middle of the year 2017. You see gold has the ability to run very quickly.
Asian demand will be the main reason for gold’s climb and what we are talking about is physical demand. The Shanghai index and the Dubai index, are going to be the new price setters, definitely not the New York index.
All we have to look at is purely supply and demand. So looking at jewelry demand, plus central bank buying, plus the ATFs, demand is actually bigger than mine supply and scrap supply, therefore we are running down inventory all around the world, and given the fact that most of the word’s inventory in gold is tied as jewelry in India, it looks like most of the words gold is not available anymore.
A global research team at Bank of America Merrill Lynch expects gold to close in on $1500 per troy ounce. Barry Dawes of Paradigm Securities told CNBC today that he expects gold to reach $1500 an ounce by the end of the year too. On the other hand, Societe General analysts, believe gold could reach $1350per ounce in the early part of next year, and UBS sees an average price of $1400 per ounce across 2017.