CPM Group - the global commodities research and advisory firm thinks that gold is currently at its cyclical bottom. The prices could see sharp rise between 2016 and 2023. Fresh all-time highs may be seen only after 2016. Until then, the gold prices could remain range bound between $1,240 and $1,500 per troy ounce.
According to Jeffrey Christian, Managing Partner, CPM Group, there were quite a few instances of massive financial, economic and political imbalances that caused all of the economic problems over the last 12 years. None of those issues have been dealt with effectively. Investor concerns over such long term imbalances could resurface by 2016-’17. As demand starts to intensify again, supply also will have shrunk, owing to severe mine cuts undertaken by miners in response to falling gold prices.
CPMG anticipates the US Fed to pull back on stimulus by early 2014. However, they believe that Fed tapering is already priced into the gold market.
The consultancy reiterated its positive outlook on gold as a safe bet for long-term investment. It expects a sharp rise in gold prices after 2016 and also forecasts new nominal highs above $1,921 in eight to ten years’ time.