Gold may yet reach US$3000 an ounce, despite recent downward trends and a current level of around the US$1,200 mark, according to ETF Securities' Graham Tuckwell.
Speaking at an event at the ASX marking 10 years since ETF Securities launched the world's first gold exchange traded product (ETP), Tuckwell said economic uncertainty meant gold's prospects are better than many forecasters realise.
Tuckwell, who has built his reputation around the gold ETP, denied that recent highs were a bubble. He said the gold bull market has not ended, because "nothing has actually changed."
"The big problem out there is governments have spent too much in terms of their budget deficits; they've certainly spent too much by the central banks buying bonds and other financial assets via printing of money."
Tuckwell, who was reportedly worth $775 million in 2012, said that potential tapering in the US Federal Reserve's quantitative easing program does not deal with the problem.
"It's one thing to actually slow down the bond purchases, but where's the repayment of them, where's the reversal of that printing of money? If it doesn't get reversed, the only thing that can happen is the debasement of the currency, and history shows that."
He said that as interest rates rise, budget deficits are going to feel the pressure. He suggested that current improved sentiments may be down to the fact that, after years of tough times, "everyone wants a party."
"Gold is the ultimate headmaster on the countries' deficits, fiscal discipline, and the value of currency." He said it could reach US$3000 an ounce within a "relatively short time frame."
The US$3000 figure is wildly above most forecasts, which are mostly flat at the current level. However, UBS global commodity analyst Tom Price said these flat forecasts are based less on informed analysis than on the fact that "people just don't know what's going on."
Price said that there was serious uncertainty in the US and China - saying "there's lots of doubts about the state of the financial system in China," adding, "and of course you can always rely on Europe to stuff something up."