Gold may fall toward $1,000 an ounce by 2015 as the economic recovery curbs demand for bullion that rallied the past 12 years, said Nouriel Roubini, professor of economics and international business at New York University.

A lack of inflation and better returns from other assets such as equities are two of six reasons why prices will trend lower, according to an article written by Roubini and published June 1 on the commentary website Project Syndicate. The metal fell 16 percent to $1,403.62 in London this year and is trading 27 percent below the record $1,921.15 set in September 2011. 

Prices that rallied as much as sevenfold since 2000 entered a bear market in April after some investors lost faith in gold as a store of value. Unprecedented money printing by central banks to bolster economic growth helped send U.S. equities to records while failing to spur inflation. This year’s sales from gold-backed exchange-traded products now exceed additions in the previous two years amid speculation that the U.S. Federal Reserve will curb its debt-buying program.

“All investors should have a very modest share of gold in their portfolios as a hedge against extreme tail risks,” wrote Roubini, known as Dr. Doom for predicting hard times before the global financial crisis began in 2008. “Other real assets can provide a similar hedge, and those tail risks, while not eliminated, are certainly lower Monday than at the peak of the global financial crisis.”

Gold is the second-worst performer this year in the Standard & Poor’s GSCI gauge of 24 commodities, after silver. The S&P GSCI fell 3.9 percent since the start of January and the MSCI All-Country World Index of equities rose 7.7 percent. Treasuries lost 1.2 percent, a Bank of America Corp. index shows. 

(Bloomberg)