A Golden Era for the Yellow Metal

Posted by Gene Epstein - Barron's

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WHITHER THE GOLD PRICE? That all depends on another question: Whither the global economy? If “to hell in a handbasket” is your answer, then go for the gold: A price of $2,000 an ounce or more, versus the current $1,345.90, looks quite plausible under those circumstances.

The Barron’s outlook, by contrast, might disappoint the most fervent bulls. Assuming that panic about the global economy will begin to subside to mere gut-level fear of the chronic sort, the bull market in gold that began in 2005 will slow its pace in the next few years. By 2015, the average annual price of gold could be $1,500 an ounce, albeit with plenty of fluctuations around that average.

Gold bulls, including gold-fund manager John Paulson, foresee much higher prices for the yellow metal.

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