Predictions About The Future

In early 2013, Bloomberg surveyed analysts about the year-end gold price. The median response was $1,815 per ounce. The actual ending price? About $1,200 per ounce. Although the article's author puts much of the blame for the wildly overestimated gold price on politics, we have a simpler explanation: Price predictions for any commodity or financial instrument are extremely difficult and are often incorrect, especially in the short-term. Of course, if this were not the case, the argument for market efficiency would be much weaker.