Trader 'sees gold at US$5000 by 2012'
Financial markets trading innovator Welles Wilder of Christchurch is predicting gold will reach US$5000 an ounce within two years, another Christchurch trader who has taken up some of Wilder's methodology says.
Oli Hille, who trades currencies onscreen from his Sumner office, said Wilder's gold price prediction would be included within a series of interviews he had done with prominent people in New Zealand for his planned electronic book on lifestyle choices.
The e-book, Creating the Perfect Lifestyle, to be launched in May, will also bring in associated interviews with Prime Minister John Key, Alan Duff (writer of Once Were Warriors) and former All Blacks Scott Robertson and Chris Jack.
Hille said Wilder (now elderly and living in Christchurch) had been lauded worldwide for his acumen and contributions on technical trading and been singled out in financial magazines such as Forbes and Barron's.
Wilder confirmed he believed gold would rise in price towards US$5000 partly on United States dollar weakness and also on the back of buying by the hedge fund industry to preserve the value of their funds.
Hille said he did not agree with Wilder's upside assumption and was much less bullish on the price of gold.
"That's not a view I hold. I don't think the US dollar is going that much in the next two years ... he implies his call is based on the US dollar becoming weaker and weaker and basically falling out of bed."
A Christchurch fund manager said there were plenty of bullish predictions on the price of gold ahead.
One set made by Goldman Sachs in December 2009 predicted an average price of US$1350 an ounce in 2010 and US$1425 an ounce in 2011.
Yesterday afternoon gold was trading around US$1076 an ounce.
Hille uses technical trading methods, including some developed by Wilder, such as a relative strength index (RSI), which helped a trader decide when to take short or long buying positions based on the trend line in currency crosses.
Wilder's RSI, average directional index, and average true-range indicators were used by most major institutional and retail currency and commodity trading platforms in the world.
Hille said he did not refer to views or predictions on where the price of gold, currencies or other commodities were going in terms of his trading strategy. His trading choices instead were based around relatively short chart moves by a currencies or commodities and where that might mean the future direction lay. The choices were based around new price peaks or troughs over a 20-day cycle.
"The system that I use is called the turtle trading system ... started by a guy called Richard Dennis in the 1980s – he is reported to have turned US$400 into US$200 million. His is considered a trading legend."
Hille said he would market his book Creating the Perfect Lifestyle through an email contact list of around 13,000 people in New Zealand and overseas, and he was also talking to a British publisher about a physical version. He hoped to sell 5000 copies in the first week of launch.
The book, subtitled "what I wish I'd known when I was 17" looked at the issue of creating the life that you want, rather than following a career plan that stops someone from being able to do what they want when they want.