The Gold Report: Your recent commodity price research shows a gold price of around $1,811/ounce (oz) for 2013. Could you talk with us about how some of the macroeconomic issues influence that forecast?
Ian Preston: When we look at gold, we don't have in mind a specific supply/demand balance going forward. It's easy enough to see the supply side. In trying to forecast a price for gold, we tend to run out a 4% per annum contango from the current gold price until we think U.S. interest rate policy will reverse and rates will start to climb. That stage just keeps on moving outas it has with Quantitative Easing (QE) 3.
"If accommodative fiscal policies continue globally, gold could go significantly higher."
We look at the gold price to forecast earnings, and over the next 6 to 12 months, we'd expect $1,650/oz at the lower end and, if it breaks through, $1,8501,900/oz at the upper end. If accommodative fiscal policies continue globally, it could go significantly higher. But bear in mind that as equity analysts we're trying to forecast earnings, and to do so we want to be as close as possible to where the gold price will be for the next three to six months, even if the range is quite broad. Continue reading "Goldman Sachs' Ian Preston Surveys the Gold ETF vs Equity Battleground"