Two Contrasting U.K.'er Forecasts For Gold

One bullish, one bearish. The bull is Dominic Frisby, who predicted $1,400 gold for this spring. He's backtracked somewhat, given gold's disappointing performance, but he's still a long-term bull.

I can't help but think that the credit-based, fiat monetary system under which we operate is going to end badly. Winston Churchill said, "All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster."

Put simply, we have burdened ourselves with too much debt at almost every level of society, from government to corporate to individual. The simplest way out is some kind of currency devaluation.

As far as his forecast is concerned, it's based upon a seasonal factor: the expectation of a spring blow-off. He concedes that the spike he's waiting for may have come in November, which would mean that gold would stay steady for some time.

The bear is Gary Reynolds, who declares that he's shorting gold. A Euroskeptic of a sort, he thinks it would be better for the region if the Euro was abandoned; he does, however, note that there's too much political will behind the currency for its abolition to come in the foreseeable future. His bearish call on gold is based upon a deterioration of the Euro and a tepid recovery, which would keep inflation down.


One of the features of range-bound markets is that they call forth unusually wide differences of opinion. If the aim of the gold market is to fool as many people as possible, then gold will stay range-bound.