Monday, August 04, 2008
The year-end version of the "Guess the Price of Oil and Gold" contest is setting up to be quite a thriller and market analysts are providing no clear direction of what to expect as seen in these Bloomberg Video summaries earlier today.
Last week Goldman Sachs said we should be at $150 a barrel by the end of the year and others see a hasty retreat to the $80-$90 level, now seen as something of a floor under the current price based on marginal production costs.
As for the price of gold, extrapolating from the current correction leads some to think that we're headed back into the mid-to-low $800 range with perhaps somewhere in the $700s the more likely destination.
Meanwhile, calls for a year-end price of $1,200 or more are now routinely heard given the amount of monetary and fiscal stimulus that looks to be required to prevent the U.S. economy and financial markets from spiraling downward anew.
Entries will open for the year-end oil and gold contest sometime in September.
UPDATE - Aug 4th, 2008 - 1:30 PM
Forgot to include this outlook from Deutsche Bank via the Telegraph:
Deutsche Bank has called the top of the commodity cycle. The uber-bulls of the oil, food and metals boom have advised clients to take profits before the downturn engulfing most of the global economy works its inevitable effects.
Oil will slide back towards its "marginal production cost" of $60 to $80 a barrel; gold will slump to $650 an ounce as the dollar recovers against the euro; copper, lead and tin will slowly halve in price; grains will calm down as harvests in Australia and the Eurasian Steppe return to normal.