By David Lew
Whom should we believe on gold prices? Jim Rogers, Peter Schiff or Nouriel Roubini? That is the questions I have been asking several bullion traders and gold dealers across China these days. Some are optimistic and agree with Schiff that gold will indeed cross the massive $5000 per ounce mark that Schiff has predicted. Others say people like Schiff are inflating the value of gold by inflated predictions.

But several bullion analysts agree with the prediction from Jim Rogers that gold prices will touch $2,000 per ounce by the next decade. “It is a realistic prediction on gold prices,” said a bullion dealer in Beijing. Not many are ready to accept the argument from Nouriel Roubini that it is speculation that is driving up gold prices and the yellow metal would stabilize around $1,000 ounce.

Jim Rogers is renowned global commodities investor. Peter Schiff is the president of EuroPacificCapital. Nouriel Roubini is a leading global economist and Stern School of Business professor.

Schiff has consistently held that gold at the current prices is not at all high and expensive as the yellow metal is headed for a whopping $5,000 per ounce in the next decade. “Inflation pressures and declining dollar value are fueling gold prices up and up, and it will eventually hit a record of $5,000 per ounce,” Schiff says adding: “Gold is money, not just some other commodity. People are going to go back to traditional money.”

Interestingly, all these months, Schiff has been accurately predicting the run-up in gold prices from $700 last year onwards. But is gold going to $5,000 by 2012 as Schiff says? Can the Schiff gold prediction go out of track here?

Bullion analyst Mark Robinson says gold at $5,000 forecasted by Schiff is packed with lots of speculation, hysteria and lacks fundamentals right now. "May be, gold might touch this level after many years. But to say that gold will touch the mindboggling figure of $5,000 per ounce in the next few years is a prediction we need to believe with a pinch of salt. Gold prices are not going to skyrocket so soon as some analysts like Schiff are forecasting these days,” says Robinson.

Robinson is not alone in doubting the fundamental arguments on gold put forward by Schiff. Economist and Stern School of Business professor Nouriel Roubini has argued that analysts like Schiff and investors like Jim Rogers who has predicted gold prices to rise to $2,000 per ounce do not get the yellow metal fundamentals right.

Nouriel Roubini says gold will touch $1,100 or so but $1,500 or $2,000 as predicted by Jim Rogers is utter nonsense. He had no words to say when pointed out that Schiff has predicted gold prices at $5,000 per ounce! “Gold’s continued rise is merely the speculative function of a bubble, not a reflection of fundamentals,” Roubini said.

To which Schiff and Rogers have retorted:

Peter Schiff: “I have to respectfully disagree with Nouriel Roubinni… the fundamentals do support higher gold prices What he doesn’t understand … is that the government is changing the fundamentals with all the money it’s printing.”

“Governments all around the world are printing money, so that changes the demand. Commodities, and gold in particular, have to rise in price when governments are creating so much money (and) interest rates are so low.” “That’s not a bubble, it’s just the reaction to the debasement of paper money.”

“Gold continues to remain strong in the face of stock sell-offs, which indicates that it has “not yet decoupled from other assets and rising despite the fact that assets like stocks are falling.”

Jim Rogers: Rogers has countered Roubini by saying that the latter does not about the way in which gold prices have been moving up historically. “I think gold is go over $2000 some time in the bull market, but depending on what happens in the world it could go much, much higher,” Rogers said. “The old high, back in 1980 adjusted for inflation, would be over $2000 now, just to get back to the old high. So we’ll certainly get there some time in the next decade.”

Rogers, chairman of Singapore-based Rogers Holdings, said in an email to Commodity Online: "The price of gold will double to at least $2,000 an ounce in the next decade or by 2019."

So as a bullion market trader, fundamentals that drive gold prices vary from persons to persons, analysts to analysts—whether they are Jim Rogers, Peter Schiff or Nouriel Roubini. Several analysts agree that the US Federal Reserve's actions have largely powered the recent dizzying rise of gold prices.

Whom to believe in gold price forecast is your choice—whether they are Jim Rogers, Peter Schiff or Nouriel Roubini who have differing views on the yellow metal.

David Lew is a Precious Metals commentator with Commodity Online. You can contact him at info@commodityonline.com