By David Lew
The rally in gold prices has driven several bullion analysts to frenzied forecasts. Some say gold prices will reach $2,000 per ounce soon. Others are predicting big boom for the yellow metal, saying gold prices will zoom to $5,000 and eventually to even $15,000 per ounce in the years to come.

What is happening in bullion market these days? Yes, agreed that weakening dollar, global economic meltdown, shrinking gold supply and increasing cost of mining gold from the earth are all making gold the most-sought after investment these days. That is also driving the yellow metal prices to record highs.

These days, the biggest gold buyers are not individual customers or families, but global central bankers that are vying with each other to accumulate gold reserves in an attempt to get out of their decades-old dependence on the US dollar as the best asset class. India jumped into the bullion fray to buy 200 tonnes of gold from the International Monetary Fund (IMF) early this month. Other countries like China, Russia, Brazil and Sri Lanka are frantically trying to accumulate gold reserves.

Agreed that gold has emerged as the best asset class among bullion traders, central bankers and families across the world, how far can the yellow metal price surge?

One of the avid proponents who is arguing that gold price will surge past $2,000 soon is the legendary commodities investor Jim Rogers. Rogers, chairman of Singapore-based firm Rogers Holdings, says gold prices are booming because currencies across the world are dropping and the US dollar is collapsing. His latest forecast: gold will touch double the current price—around $1,150. Meaning, Rogers says gold will surge to $2,300 per ounce in the coming months.

But it is easy for renowned investors like Rogers to make forecasts like this. Rogers is a big commodities investor. He invests basically in agricultural commodities. He is going gaga over his commodities investments in the hot destination he loves, China. But is Rogers investing in gold these days? No, not to my knowledge. Investors like Jim Rogers love gold, but they hate to invest in gold at this high price.

Investors like Rogers are not putting in money into gold these days because they know sensibly well that investing in yellow metal is “nonsense.” Because, gold price is at its peak these days, and anyone putting in money in gold at this high rate will be taking a huge risk.

In fact, all big investors are these days selling gold. Imagine the money bullion traders and speculators have made out of the global bullion market in November, as gold price surged to nearly $1,150 last week! So if you buy gold at this rate, those had bought gold at $700 per ounce one and half years ago would be laughing their ways to the banks.

So, what is the advise to bullion investors? I would say the current bullion market is the one for selling, not for buying. Sell your gold now, if you are getting any price above $1,000 per ounce. Gold price is sitting on a bubble. The bubble can burst any time like the stock market crashes. When the bubble bursts, gold price will come down below $1000 and you can buy then your precious metal.

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