The lack of a reliable income stream makes gold notoriously hard to value objectively, whilst the key drivers constantly seem to be changing. The current price is around $1,645 per ounce, having been as high as $1,900 last September and as low as $710 in November 2008. This note acknowledges the uncertainties by presenting three (hopefully) plausible outcomes for the next year or two: a “central” scenario where the price of gold climbs to a new nominal record of $2,200; a “high” scenario where it surges to $5,000; and a cautionary “low” scenario where it drops back to $1,000.
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