Bloomberg publishes a survey of which way 42 gold traders think the gold price will go each week. They have just published the survey with the tittle:
"Gold May Fall on Expectations Dollar Will Rally, Survey Says"
Blooomber says "Gold may fall for a second week on speculation the dollar will rally against the euro, eroding the appeal of the precious metal as an alternative investment"
However, Bloomberg also says the survey has been correct 59% of the time. Given that there is a 50% chance that the gold price will go up or down each week, I ask the question how accurate is the Bloomberg Gold Price survey?
I suggest its not very accurate at all and perhaps it would be even less accurate if it wasn't for James Turks contribution to the survey. Bloomberg says James Turks forecasts are the most accurate of their 42 gold traders.
James Turk is the co-founder of Channel Islands-based Goldmoney.com, which stores about $48 million of gold for owners in 102 countries.
Turk told the Bloomberg survey this week "Traders may be more focused on commodity prices as an indicator of inflation than they are on government reports this week for producer and consumer prices."
Turk said, "The risk of inflation remains, and that may boost gold.
"Gold is very undervalued,'' Turk said. Based on the historical relationship between gold and oil, the precious metal should be trading closer to $700 an ounce, he said. "It has not kept pace with the rise in commodity prices, and particularly the jump in crude oil,'' Turk said.
Lets see who is right this week, the Bloomberg survey or James Turk.
You can read James Turk's regular commentary on the gold price at his Founders Commentary page at goldmoney.com
You can read the first chapter of James Turk and John Rubino's latest Book here "The Coming Collapse of the Dollar and you can profit from it. Make a fortune investing in gold and other hard assets."
You can read the bloomberg gold price survey which is wrong 41% of the time here.