Gold’s 12 Year Run May Finally Be Over

It is no secret that gold is one of the most talked about assets of the last few years, as this metal’s historic run has put it in the limelight. The price of gold has gone up for 12 straight years, and is on pace to make it 13 when this year comes to a close. But it seems that despite all of the gold bugs calling for the metal to surge to unbelievable highs, major financial institutions are calling for the gold bubble to finally burst in the coming months [for more gold news and analysis subscribe to our free newsletter].

The Anti-Gold Sentiment

Being bearish on gold in the last decade has probably left you with your tail between your legs, as it has been one of the best performing assets out there. Its safe haven appeal and ability to keep pace with inflation has made it a staple product in many portfolios, but some of the biggest names on Wall Street are calling for the metal to finally endure a contraction.

Goldman Sachs Group Inc (NYSE:GS)

Let’s start with Citigroup Inc. (NYSE:C). The firm called for gold to experience mild gains in 2013 to average about $1,750/oz, but sees it falling in 2014. Goldman Sachs Group, Inc. (NYSE:GS) also hopped in the ring by calling for the average gold price to take a hit in 2014. BNP Paribas SA (EPA:BNP) recently cut its outlook for gold in the next two years, and similarly agrees that the precious metal will rise in 2013, only to pull back in 2014 as the bubble finally gives way.

Most of the forecasts cite a stronger U.S. economy in the coming years, as we finally works our way out of the 2008 recession. Goldman specifically pointed out that the shale gas revolution will mean that crude oil can no longer hinder global growth and that global economies will be able to move swiftly forward. The IMF predicted the global economy to grow 3.6% in the coming year; a jump from 2012′s 3.3% [see also Preparing For Economic Headwinds: Bill Gross’ Commodity Picks].

What About Inflation?

These forecasts all seem to call for a similar move in gold, citing global growth and a higher risk appetite in the investing world. But what about the prospect of inflation? With money printing and stimulus packages in place in a number of different countries, it seems likely that inflation will have to pick up at some point in the near future, and some argue that it already has. Even if the global economy finds its footing, rising inflation has the potential to put gold back on the bull path. Then again, a strong economy with curbed inflation will almost certainly put pressure on gold prices. The only question left is which phenomenon will be more prominent: inflation or global economic growth.

This article was originally written by Jared Cummans, and posted on CommodityHQ.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!