A lot of people have been asking this question of late. I hear that Marc Faber has recently said that gold will move down to US$800 in the short term. However if I look at gold from a 1 yr perspective, I believe gold is headed up all the way to about $1300-1500. the reasons are many but biggest of all is the dual pressure of falling dollar and a move towards reserves other than dollar by most central bankers around the world. a recent IMF paper has this very interesting graph
The fact that US$ share of reserves has been falling can be seen but what is heard now is an indication that not only is the share falling, its falling faster than it did in the past. Recently RBI also bought a large chunk (US$200 bn worth) of gold to replace the dollar reserve. And increasingly all the national reserves that are loosing dollars and searching for alternatives, will find it in precious metals (mostly gold).
Hence I am a big bull on Gold
