Predictions 2013
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Predictions That Went Wrong in 2012

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Gold Rush

The chorus of gold bulls that predicted the yellow metal would hit the $2,000 per ounce level by the end of 2012 are in for a big letdown because we are well into December, and gold is still about $300 away from their target.

Proponents of the precious metal have argued that massive quantitative easing by major central banks would encourage spending and spur inflation, which would push investors to gold - seen as a hedge against price rises. However, this has failed to materialize, with gold falling 2.5 percent since the U.S. Federal Reserve announced QE3 (quantitative easing) on Sept. 13.

Demand from the two largest consumers in the world, China and India, has also failed to provide much support for the precious metal this year. India's gold demand is expected to be almost 19 percent lower in 2012 compared to last year, local media reported, due to subdued economic growth and a weak rupee, which makes gold imports more expensive. Meanwhile, Chinese gold consumption fell 8 percent in the July to September period on weaker jewelry and investment demand.

And there is limited upside for the precious metal in the coming months, say experts, given the bleak inflation outlook. From a technical perspective, chartist Daryl Guppy said if gold fails to cross the $1,800 resistance level soon, the commodity could be in for a steep fall.

Photo: Hans-Peter Merten | Photographer's Choice