Editor’s note: This article was first published in June 2013 and reports a forecast that has since expired. Gold did not fall to 1,000 dollars before 2015, and it has since traded far higher.
Nouriel Roubini, one of the three crisis “gurus”, gives us his opinion on the price of gold. Roubini thinks gold is heading towards 1,000 dollars before 2015, and could even fall below that, and he gives us some reasons why that scenario could happen.
Roubini thinks gold has been through a bubble that accelerated during this crisis, when some were saying the price could reach 3,000 or 5,000 dollars, and others even talked about 10,000 dollars.
-
The biggest peaks in the price of gold tend to come in extreme crises, because gold becomes a safe haven. The crises are over.
-
Now, with the economic recovery, investors prefer shares, because of their capital gains and because they pay dividends. Investing in gold does not pay dividends.
-
Real interest rates are rising. That kills the price of gold.
-
Governments with debt problems are selling gold. That pushes its price down even further.
You can read the full column on Project Syndicate.
Featured image: Szaaman, Public domain, via Wikimedia Commons.
