Gold has been getting poleaxed in recent months, though it remains just below $1400/oz.
In a piece up at Project Syndicate, economist Nouriel Roubini says gold will fall to around $1,000 before the end of 2015.
He gives six reasons why.
- Gold spikes during extreme crises. The crises are over.
- Gold does well during periods when there’s a risk of high inflation. That clearly is no longer a big worry, given how much central banks have unsuccessfully tried to stoke even modest inflation.
- Now with the economy recovering, nobody wants to be in rocks that don’t pay any dividends.
- Real interest rates are rising. That kills gold.
- Governments with debt issues are selling gold.
- Gold was juiced by right-wing fanatics in the US. That boom is over.