Thursday, May 20, 2010

Goldman Sachs Executive Says Gold Near Cyclical Top

In a recent speech at the World Mining Investment Congress, Goldman Sachs' global head of commodities research Jeff Currie said that gold's run-up is in part due to a low real-interest rate environment. He also said in an interview, however, that gold is nearing its cyclical peak.
"The very long term price for gold is somewhere around 750 dollars a troy ounce," he says, and, when asked where the market currently is in the extremely long term gold cycle, he told Mineweb "on a scale of 0 to 10, with ten being the top of the cycle, I would say it is somewhere around 8 or 9."
Currie isn't a gold skeptic, not by any means, but the does say the top of the cycle might come in 2011.

If he and Goldman are right, then this cycle will prove to be fairly short. Gold's long-term bear market lasted about twenty years. If the time when the London Gold Pool was suppressing the price is included, its last bull market lasted about fifteen years.

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