Macquire: Gold should be $2,000/oz

Earlier this week, analysts at Deutsche Bank published research claiming that gold should be trading at $1,700 an ounce, due balance sheet expansion at central banks. Not to be outdone, Australian bank Macquarie has come out with an even more optimistic forecast for the price of the yellow metal.
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According to Macquarie’s commodities research team, gold should be trading at $2,000/oz. The team argues that with all the prevailing political and economic uncertainty stalking the markets, the price of gold should be around 53% higher than it is today.

Why isn’t gold worth $2,000/oz?

Why isn’t  the metal worth $2,000/oz? Macquarie has three theories.
Firstly, the bank’s analysts take a page out of the S&P 500 CEO’s handbook and blame the strong dollar. Just as S&P 500 companies have been blaming the strong dollar for weak earnings for the past 24 months, Macquarie points out that if measured in other currencies the price of gold is much closer to its 2011 peak.
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For example, in sterling terms, the price of gold is around £1,000/oz at the time of writing compared to the 2011 peak of £1180/oz. Meanwhile, gold priced in South African rand is trading more than 33% above its 2011 high of ZAR 15,000 at ZAR 19,157. That said, this rally has more to do with a weak rand and South Africa’s economic troubles. Since 2011 the rand has lost a tremendous amount of value, up from 7.1 to the dollar in 2011 to 14.6 today as devaluation that will have wiped out almost all of your gold gains.