Gold hovers at $1400 as investors scrap over the future of bullion prices

Gold prices have fallen nearly 20 percent so far this year and one of the big questions for investors is always going to be an accurate forecast for short to medium term bullion prices as analysts and traders lock horns over their predictions.

Latest Gold Futures Price

Spot gold gained to $1399.50 an ounce yesterday, or 0.2 percent higher which is a poor show considering steep falls for the US dollar which typically would push bullion higher.

Gold Price Predictions

NYU professor of economics and international business Nouriel Roubini predicted earlier this week that gold could indeed fall back below $1000 an ounce. “At the peak, gold bugs – a combination of paranoid investors were happily predicting gold prices going to $2000, $3000 and even to $5000 in a matter of years. But prices have moved mostly downward since then. There are many reasons why the bubble has burst, and why gold prices are likely to move much lower, toward $1000 by 2015.” commented Roubini in a recent article on the Guardian website.

By far Roubini, nicknamed Dr. Doom, is the most bearish in his predictions; on Saturday he published a report highlighting six reasons why prices would fall to $1000 by 2015.

Meanwhile, banking giant JP Morgan has recently cut its 2013 gold price forecast to $1595 a troy ounce, down from a previous estimate of $1745. In the short term, analysts at the bank expect gold prices to average $1450 an ounce in the second quarter, 18 percent lower than its previous forecast.

However, George Soros has significantly increased his gold holdings recently. The giveaway that Soros is extremely bullish on gold, Soros bet makes no sense unless he thinks gold is heading up.

The orchestrated decline in gold and silver prices is apparent from the fact that the demand for bullion in the physical market has increased while short sales in the paper market imply a flight from bullion.

Mathieu D’Anjou, senior economist at Desjardins Economic Studies said that although he is expecting prices to decline, he doesn’t think that prices will reach Roubini’s target. He expects prices to hit $1200 in the long term.

D’Anjou said that a drop below that level could cause more gold producers to shut their doors, which would decrease supply and would eventually be bullish for the yellow metal.

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Gold hovers at $1400 as investors scrap over the future of bullion prices