By Paul Farrow
Published: 11:56AM GMT 15 Dec 2009
Jeffrey Nichols, managing director of American Precious Metals Advisors
"Notwithstanding the recent correction and the possibility that gold may yet fall further before bargain hunters and other buyers (including central banks) reappear the four pillars of gold-price strength remain intact.
They are inflation-fueling US monetary and fiscal policies; Central bank reserve diversification with the official sector being a taker rather than a supplier of gold in 2009 and the next few years; expanding retail and institutional investor participation in the United States, China, and around the world; and declining world gold-mine production.
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Investors in Venture should opt to play a waiting gameWe have consistently warned (and continue to do so) that golds advance would be marked by high volatility and occasional sharp reversals that would lead some to believe the long bull market in gold has ended and we will continue to hold this view even if the metal falls back yet another $100 an ounce.
Looking ahead to 2010, dont be surprised to see gold at $1,500 or higher by the end of next year."
Ted Scott, director, UK Strategy, F&C
"The only way that gold can underperform is if the US and other developed economies recover in a conventional way by cutting spending and raising taxes while at the same time embarking on a period of stable economic growth.
This would prompt a strong and sustained rally in the dollar as confidence in the US economy rose together with bond yields and interest rates.
Given the significant challenges ahead, a muted and fragile recovery appears more likely. With the likelihood that the world will take several more years to heal the wounds inflicted by the credit crunch an alternative asset like gold will remain attractive in such an uncertain environment.
The price of gold may have risen a long way recently but in real terms is still well below todays real price high of $2300 achieved in 1980. It is over-bought and is likely to see a correction when the dollar has a technical rally. Beyond that, gold remains an attractive each way bet."
Jim Rogers, commodity expert
"I have learned the hard way not to sell something short in a cyclical bull market. I'm not buying anything now, but if I am buying, I'll be buying agriculture, silver, natural gas, palladium and all things that are very depressed," he said.
I wouldn't buy gold at these prices but I also wouldn't sell the gold I own", he said. Despite their recent correction, gold futures haven't fallen too far below record highs of nearly $1,230 an ounce."
ODL Markets, London retail trading providers
The recent surge in gold prices has come as people move out of dollar holdings; but a resurgent dollar can have the opposite effect.
We are now back down to the lowest levels seen in a few weeks but still remain just ahead of support at $1100.
Support at that level will likely be tested and if support holds then we may see a move back higher for gold but if support fails then the sell off will likely continue possibly back towards $1000 and dragging the other metals with it.
Macquarie Investment Bank
It has raised their forecasts for both gold and silver prices this morning. Their 2010 projections call for a $1,150 and $1,100 per ounce average gold price in 2010 and 2011, respectively. With respect to silver, Macquarie has raised their forecast to $17.69 in 2010 and $16.92 in 2011. Their research team also raised their projections for the industrial metals complex - boosting cooper, lead, and zinc price estimates.
Ian Henderson, JPMorgan Natural Resources Fund
"I think investors should focus on what is happening to currency as that is the prime mover. The general sentiment is in favour of diversification but I dont think that the metal will move by enormous amounts. Movements of 5pc get a lot of hype, but are not always deserved.
"But I still think that gold is on an upward trend and perhaps $1,000 an ounce will be the new floor, although it could rise above $1,100.
"I own gold in my personal portfolio and I have no intention of liquidating, while Im 'long on gold in my professional portfolios and I increased weighting in gold about four weeks ago.
"There is still a great deal of uncertainty on unemployment and economic growth so it makes sense to diversify into gold."
Suki Cooper, precious metal analyst at Barclays Capital
"In terms of technical trends the prospects for gold look strong but the underlying fundamentals look weak. Commodities Research has a quarterly average for Q1 2010 is $1050, but our technical analysts have a target of $1120.
"Demand for jewellery is falling and mine supply is increasing. In turn there is a larger market surplus, leading to a larger role for investment demand to play to make up for the shortfall.
"The reasons that people began to buy gold in March 2008 were plenty. Other asset classes were underperforming, Bear Stearns had collapsed, the dollar was falling to a record low, and the oil price was rising.
"These reasons are no longer in place and inflation [another reason to buy gold] is still some way off. It wouldnt surprise me if we had a little correction in the gold price but our position remains stay long."
Evy Hambro, BlackRock Gold & General Fund
The recent new all-time high in the price of gold seems to have been caused by the convergence of a number of important drivers. Falling mine supply, weaker US dollar and the potential for a reduction in net central bank sales will all support prices over the medium term.
"The key factor, though, will be investment demand which remains strong, according to the latest data from the World Gold Council.
I believe the best way to get exposure to this trend is through gold equities, rather than gold bullion.
"They [equities] are now starting to generate leverage to movements in the bullion price, something that had been conspicuously absent in recent years. As cost pressures moderate, and gold prices rise, we expect gold mining companies to perform well and deliver significant returns to investors.
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