In 2013, economist Nouriel Roubini predicted that gold prices would fall to $1,000 per ounce in 2015. It has been reported that, as the deadline for the prediction draws ever closer, more and more market experts think Roubini may have been right. Could now be the time to sell?
It seems that members of the mining sector would be the hardest hit by such a significant price drop. At $1,000 per ounce, gold would cost more to mine than it would actually be worth – and there are hardly any areas where mining companies could make cuts to reduce operating expenditures. Their only options would be to reduce exploration and development while mining less gold.
Such a price drop would be unsustainable, and a $1,000 price point would likely only be a phase. However, the compound effect of those mining reductions could create a gold supply crunch that would affect the market for at least a few years. As the year end approaches, we’ll keep our fingers crossed for the best.
