Gold is likely to fall below $1,000 an ounce, nearly half the level it reached at its peak in 2011 according to Nouriel Roubini, the founder of Roubini Global Economics. And the man credited for calling the financial crisis believes one of the key factors that will drive prices lower is "extreme political conservatives, especially in the United States"
Writing in an op-ed published by Project Syndicate, Roubini said the hyping of gold by political conservatives had become counterproductive.
"For this far-right fringe, gold is the only hedge against the risk posed by the government's conspiracy to expropriate private wealth," he said.
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"These fanatics also believe that a return to the gold standard is inevitable as hyperinflation ensues from central banks' "debasement" of paper money. But, given the absence of any conspiracy, falling inflation, and the inability to use gold as a currency, such arguments cannot be sustained," he added.
Bullion's two-year rally from 2009 to 2011, that saw prices more than doubled, showed all the signs of a classic asset price bubble, according to Roubini, who believes there are other factors that will help drive prices back towards 2009 levels.
A lack of inflation is a key driver for gold losses and global prices are falling despite quantitative easing doubling or even tripling the money supply in most advanced economies, he noted.
"The reason (for this) is simple: while base money is soaring, the velocity of money has collapsed, with banks hoarding the liquidity in the form of excess reserves. Ongoing private and public debt deleveraging has kept global demand growth below that of supply."
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Roubini also noted that gold provides no income; and, with the global economy recovering, assets like stocks and real estate are providing higher returns for yield hungry investors. Low yields on government debt have also been a factor that helped drive gold prices higher, according to Roubini, who believes people bought gold when real inflation adjusted interest rates became "increasingly negative after successive rounds of quantitative easing."
With real rates expected to rise if the global economy continues to improve and central banks pull back on QE, Roubini believes this factor will no longer supports gold prices.
The final problem for the gold bulls is government holdings of gold, Roubini said, noting that gold prices fell 13 percent in a single day in April on reports Cyprus would sell a small fraction of its $400 million of reserves.
"Countries like Italy, which has massive gold reserves (above $130 billion), could be similarly tempted, driving down prices further," he said.
— By CNBC's Patrick Allen.