WoV Challenge -- Predict the price of gold on Jan 1, 2013.

This challenge was inspired by the thread Will the Gold Bubble Burst?. The object is to predict the price of gold on Dec. 31, 2012. We'll use the Northwest Territorial Mint "ask price" at 5:00 pm on 12/31/11 as the source on the price of gold.

PM me your predictions by 12:01 a.m. Feb 1. The member who is closest will win his/her due fame on the board as a master economist and some token prize from me to be worked out later, or a donation to the charity of the winner's choice.

Predictions will be posted shortly after Feb 1.

Only a few entries so far.

Per a comment by slyter, I should clarify that the Yahoo quoted price is the "future contract price" for the following month. Perhaps he can address any questions about it. He says this does not deviate much from the actual price.

When does the gold futures contract settle? If it's the last day of the month, there could be a difference between the price on 12/31/12 (January's contract expiry) and 1/1/13 (february's contract trading as the prompt month). Also, is CBOT the market we'll use? Or Comex? Right now, the June 2012 contract is about $10/ounce different between the two markets.

Quote: rdw4potus

When does the gold futures contract settle?

I was wondering about that too. I would accept slyther's guidance if we should specify a closing number not right on the cusp of a month change.

I think it's the London Spot Price at the close that's used as the "price of gold", not the futures.

Quote: boymimbo

I think it's the London Spot Price at the close that's used as the "price of gold", not the futures.

I hope you and slyther can figure out who is in error. The spot price seems more believable to me.

[http://bullion.nwtmint.com/]

Why don't you use this. This is the price you can buy it for today.

Quote: thlf

[http://bullion.nwtmint.com/]

Why don't you use this. This is the price you can buy it for today.

Wow, coincidentally that is where I purchased my bullion a couple of years ago. It was a bit of a trek out to the sticks, but they were a very customer-friendly shop. This was when gold and silver were on the upswing and people were flocking to buy some.

It doesn't really matter to me what we use, just so long as all are in agreement (with such a valuable prize on the line!). Wizard was intending to use the Feb '12 Future which of course won't work. I think typically what you see quoted on CNBC, etc is the front-month future contract. (Feb for now, soon to change to March, etc)

Spot price is fine with me since it is fairly close to the front month future anyway. I suggest using the Ask price at that nwtmint site at 5:00pm PST on 12/31/11 as the final result. It looks like their premiums and liquidity are reasonable enough to give a true measure of current price.

I live not far from their building actually, have driven by it many times as I grew up in Federal Way, WA. Maybe I'll even go take a picture there.

Another option would be to use the GLD ETF which trades at roughly a 10/1 ratio with Gold. However with that there are management fees, etc associated with it so it is imperfect.

I would hesitate to use an ETF price for the reasons you listed.

IMO spot price should be where it's at.

Quote: slyther

I suggest using the Ask price at that nwtmint site at 5:00pm PST on 12/31/11 as the final result.

This is my vote.