2004 - oil / gold forecasts

  1. 9,081 Posts.
    Both will rise strongly in my opinion. The forecast below errs on the side of conservatism as the bull market in gold will, I believe, continue to confound the sceptics.

    Precious metals and oil / energy stocks will be standout winners in 2004.


    CHICAGO, December, 2004 – Hard asset commodities will perform strongly in 2004 while the US dollar will continue to weaken, according to leading futures and options analysts from Alaron.

    “Global tensions, US election year maneuvers, and the ‘China factor’ will be major influences in 2004,” said Scott Slutsky, Managing Director of Alaron. “We see continued strength in basic commodity prices as significant US dollar weakness creates a strong foreign demand element for US dollar denominated commodities.”

    Oil to push $40/barrel

    Phil Flynn, Alaron energy analyst, sees the price of oil pushing the $40/barrel mark in 2004, from its current $30/barrel level. Increases will be driven by the falling US dollar, continued concerns over terrorism, the slow rate of oil pipeline construction in Iraq and enormous demand from a booming Chinese economy. Flynn sees heating oil surpassing the $1/gallon level and natural gas hitting an all time high of $13 MMBtu in 2004.

    Gold forecasted at $370 - $460

    Dave Meger, Alaron metals analyst, sees metals on the upswing in 2004, led by gold, which is forecasted to climb from its current $400/ounce level to the $460 range. Fear of both terrorism and inflation will continue to motivate investors to find safe havens. Soaring demand in foreign markets will contribute to the increase, spurred by the continued weakness of the US dollar. Changes in hedging strategies by the major gold producers are also projected to lift prices."

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