Is the End of the Bull-run Near? Prices of Gold May Hit Rock Bottom in Q1

Are we there yet?

Prices of gold, long considered by most a safe haven against economic uncertainty and inflation, will decline further below $1,500 per ounce over the next three months, according to a Reuters poll of 20 hedge fund managers, economists and traders.

Most of those surveyed forecast the precious bullion will sink as low as $1,450 per ounce in the first quarter of 2012. Three respondents predict it will fall deeper toward $1,400 per ounce.

On Wednesday last week, gold dropped below $1,600 per ounce as investors liquidated their investments on speculation of a rising dollar.

What's worse, it will take the yellow metal at least until the second half of 2012 to possibly recover and regain this year's all-time highs recorded in September. Four other experts were more pessimistic and said they don't expect gold to post a new record until at least 2014.

"We believe that, in 2012, of all metals gold will be the worst performing," Christoph Eibl, CEO and founding partner of the Swiss commodity hedge fund Tiberius, told Reuters News.

Gold reached an all-time high of $1,921.15 on early September.

"To me, gold is not attractive right now because we don't see any inflation threats," said Jeffrey Sherman, commodities portfolio manager of DoubleLine Capital.

Economist and veteran trader Dennis Gartman said gold is showing signs it is near to closing its bull-run end, saying it might decelerate to as low as $1,475 per ounce, a drop of more than 20 per cent, the very definition of a bear market.

After a decade-long winning streak, "we have the beginnings of a real bear market, and the death of a bull," said Gartman, who correctly predicted the 2008 commodities slump. The trader completely exited his bullion investments last week.

Gold buying is seen to further constrict in the coming months as investors diversify away from the precious metal due to the rising U.S. dollar. In India, one of gold's biggest markets, the metal stays under pressure.